Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

XAI seeks up to $200B valuation in next fundraising

ft.com

Post reply on HN
Print view View original

51–60 of 76 posts

Re: XAI seeks up to $200B valuation in next fundraising

#51

Post by crystal_revenge »

ori_b wrote: post #46
crystal_revenge wrote: post #41

Earlier quoted context omitted.

I used to not understand as well, but then a friend asked me a question: "When Claude recommends a book, why doesn't it just link directly to Amazon and get a referral fee?" I believe what investor's are chasing in LLMs is the same thing that Zuckerberg was chasing in the metaverse: not a new "technology" a new medium . The key insight in the development of the web was that a few companies can effectively control the…

> I used to not understand as well, but then a friend asked me a question: "When Claude recommends a book, why doesn't it just link directly to Amazon and get a referral fee?" How much do I pay to make it recommend my book, rather than your book?

Interesting enough my friend's background was in SEO so this topic also came up, and currently one of my books does show up immediately when asked about the subject!

The early days of Google felt very similar to the current state of LLMs. The web at the time was filled with the laziest keyword spam, search results where awful. Then Google changed all that (hard to even imagine today): you nearly always got the results you wanted without garbage. Early Google fought spam pretty aggressively, old time HNers might recall when the Genius lyric site was caught gaming the system (more aggressively than standard SEO) and was permanently punished in Google results. Similarly early Facebook was actually pretty pleasant, just a way to catch up with old high school classmates, I don't even remember ads in the early versions.

My guess is LLMs will follow a very similar path, but because it is a new medium it won't evolve in exactly the same way. I suspect once the major players are established there will be no more SEO, but rather major advertising agreements behind the scenes. One nice thing about SEO is that anyone could do it, sadly I think we'll soon be back in a world where only big players really matter.

To be clear, I don't have any fantasies that "this time it will be better!" I'm pretty certain we'll see the same enshitification cycle play out, but I'm trying to enjoy at least being on the less-shitty part of the cycle for a moment.

Re: XAI seeks up to $200B valuation in next fundraising

#52

Post by rs186 »

Aurornis wrote: post #16
Retric wrote: post #7

Earlier quoted context omitted.

Yea, I don’t think investors really internalize that LLM companies have effectively zero moat. Customers can easily jump ship. Everyone is using effectively the same compute, nearly identical training data, very similar algorithms, etc. Worse past investments in a model become outdated quickly.

I think Hacker News readers underestimate how sticky the typical customer is. The average subscriber to these services isn’t following a constant stream of LLM news and jumping from platform to platform every time the leaderboard changes slightly. The average customer signs up and then inertia and familiarity take over. They stay signed and comfortable.

Customer of what, model?

In terms of AI coding assistant, almost every product out there allows you switch to a different model with a single click. If Gemini is not giving you the answer you want, what do you do? Switch to Claude and bang you have it.

The only thing that has some stickiness is products like ChatGPT. But that's so much more than just a model -- it's a product with many features smoothly integrated.

xAI does not currently have any product that is sticky for the average user.

Re: XAI seeks up to $200B valuation in next fundraising

#53

Post by 827a »

Retric wrote: post #7
lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

Yea, I don’t think investors really internalize that LLM companies have effectively zero moat. Customers can easily jump ship. Everyone is using effectively the same compute, nearly identical training data, very similar algorithms, etc. Worse past investments in a model become outdated quickly.

The other thing that would scare me: What percentage of Anthropic's revenue comes from Anysphere/Cursor? Think about that for a second: Given that we know Cursor is on a nine-figure ARR now, the intrinsic value in being the "default" model in Cursor, similar to Google being the default search on iOS, is now worth billions of dollars. Does Anysphere have significant exclusivity arrangements with any of these frontier model providers? They took funding from OpenAI. The ludicrous clip at which Anthropic's revenue could drop by whole percentages just because Anysphere pushes a change to prefer competitors models, has got to be the scariest business arrangement in the history of computing.

None of these companies will survive if they don't own multiple parts of the stack. As deep as possible, to the hardware if they can. That's why Anthropic is investing heavily in Claude Code, and why OpenAI is looking at hardware. You can't just build models and sell tokens, yet that seems to be Grok's entire strategy right now [1]

[1] https://x.com/elonmusk/status/1943178423947661609

Re: XAI seeks up to $200B valuation in next fundraising

#55

Post by jpalomaki »

When you spend a lot of time working with a model, you probably start developing a "relationship" with it. You know how to describe things, what to expect. The model has learned your preferences. I don't think I will be jumping from model to another just like that. Not at least to save a few bucks on monthly fees.

For more generic AI it won't be just about the models. It's also about access to data. Everybody is closing the gates to content. xAI is in interesting position because they have all the data in X. X is great source when you want to know what is happening in the world. And they have also a deal with Telegram (although I'm not sure to what data they can access).

And even if the models become commodity, I don't think they will be worthless. Plenty of companies make big money on selling commodities. If AI delivers, selling access to the models should be a business opportunity of the century. Even if margins would be low, the business will be huge and infinitely scalable.

Re: XAI seeks up to $200B valuation in next fundraising

#56

Post by rs186 »

re-thc wrote: post #26
perihelions wrote: post #8

Earlier quoted context omitted.

It's so hard to decide who to believe in this dispute. FT with multiple sources; or, a guy who's committed securities fraud in the past lying about this exact subject matter.

But he might be right? They are not seeking funding right now. So maybe tomorrow?

Seriously? If statements are only true for the specific point in time, why do people even discuss anything?

Re: XAI seeks up to $200B valuation in next fundraising

#57

Post by c-hendricks »

alexnes wrote: post #31
Analemma_ wrote: post #24

Earlier quoted context omitted.

Doesn't that suggest a 200B valuation in xAI is stupid, though? Nobody is using Grok except Elon's fanboys, where do they imagine these sticky customers are going to come from?

Please check google trends in regards to Grok (on a worldwide scale, and compare to openai, claude and deepseek). The winner is not clear at all. And grok is surprisingly popular.

Huh? I see pretty clear winner with chatgpt

https://imgur.com/a/a5oUldD

Re: XAI seeks up to $200B valuation in next fundraising

#58

Post by v5v3 »

Retric wrote: post #7
lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

Yea, I don’t think investors really internalize that LLM companies have effectively zero moat. Customers can easily jump ship. Everyone is using effectively the same compute, nearly identical training data, very similar algorithms, etc. Worse past investments in a model become outdated quickly.

>No one is using Grok. They have no path to profitability. They have very low traction among consumers, and even lower traction among enterprises. Their CEO seems to think that copy-pasting code into a web browser is a good strategy for attracting programmers.

Leaving aside the controversies, Elon is one of the best players at capitalism there has ever been. As per his wealth. And to think you and I know more than someone with a deep network of Investors and fellow CEO's would be a bold claim.

Re: XAI seeks up to $200B valuation in next fundraising

#59

Post by v5v3 »

rs186 wrote: post #52
Aurornis wrote: post #16

Earlier quoted context omitted.

I think Hacker News readers underestimate how sticky the typical customer is. The average subscriber to these services isn’t following a constant stream of LLM news and jumping from platform to platform every time the leaderboard changes slightly. The average customer signs up and then inertia and familiarity take over. They stay signed and comfortable.

Customer of what, model? In terms of AI coding assistant, almost every product out there allows you switch to a different model with a single click. If Gemini is not giving you the answer you want, what do you do? Switch to Claude and bang you have it. The only thing that has some stickiness is products like ChatGPT. But that's so much more than just a model -- it's a product with many features smoothly integrated. x…

>xAI does not currently have any product that is sticky for the average user.

Err... What about twitter? Where it is firmly embedded. And Telegram recently has been paid to do the same.

Re: XAI seeks up to $200B valuation in next fundraising

#60

Post by v5v3 »

bee_rider wrote: post #11
Retric wrote: post #7

Earlier quoted context omitted.

Yea, I don’t think investors really internalize that LLM companies have effectively zero moat. Customers can easily jump ship. Everyone is using effectively the same compute, nearly identical training data, very similar algorithms, etc. Worse past investments in a model become outdated quickly.

Doesn’t xAI have a bunch of their own data-centers? https://arstechnica.com/tech-policy/2025/07/xai-gets-an-air-... I wonder how investors have priced in their regulatory situation.

Think it only has that one (plus the x/twitter ones).

They bought a cargo ship worth of GPUs though

Post reply on HN