So how much more runway does this give OpenAPI? A year?
Less than a year. They spent $9B last year and are spending more than that this year.
OpenAI raises $8.3B at $300B valuation
51–60 of 294 posts
Re: OpenAI raises $8.3B at $300B valuation
#52Given their current product offerings, I really don't see a way they could ever justify a $300B valuation unless they get everyone on the planet to subscribe to their $200/month plan.
I'm calling it now: investors are gonna get burned hard on this one. Cause right now all they have is "well we are working on superintelligence" and to that I say "great, then what?". Even if they do make that breakthrough I don't see how that will equate to that kind of valuation, especially considering that Anthropic and Google are both hot on their heels.
Re: OpenAI raises $8.3B at $300B valuation
#53Re: OpenAI raises $8.3B at $300B valuation
#54So OpenAI is running at a $13B ARR, meaning this is a ~23X valuation. I don't have a good read on margin. But this would imply massive growth assumptions which I struggle a bit to understand where they come from. (1) New customers new to AI or migrations from Claude/Perplexity/Google: The overwhelming majority of people already know about the offerings, leaving most new people to come from residual people who identif…
23X revenue multiple is not an expensive valuation for something growing well over 100% YoY, even by public market standards let alone venture capital valuation.
Yah but is that growth really an ARR or 1-2 year revenue considering AI capability growth across players, open weight / source models, and inevitable price wars?
Re: OpenAI raises $8.3B at $300B valuation
#55So OpenAI is running at a $13B ARR, meaning this is a ~23X valuation. I don't have a good read on margin. But this would imply massive growth assumptions which I struggle a bit to understand where they come from. (1) New customers new to AI or migrations from Claude/Perplexity/Google: The overwhelming majority of people already know about the offerings, leaving most new people to come from residual people who identif…
It's not about the products or revenue probably. It's about its stocks. Nvidia market cap is 4.262 Trillion dollars and for META it's $1.9T (in the six place among the tech companies). After the IPO, OPAI is guaranteed to be among these stocks, so 300B is pretty cheap today.
Re: OpenAI raises $8.3B at $300B valuation
#56Why is this article from nytimes - they aren't a great source for VC deal info.
Re: OpenAI raises $8.3B at $300B valuation
#57Earlier quoted context omitted.
> xAI loses $1 billion per month Isn’t the vast majority of that capex?
Paying Oracle monthly bills is not capex.
It was recently reported by Reuters:
XAI is training Grok on 230,000 graphics processing units, including Nvidia's 30,000 GB200 AI chips, in a supercluster, with inference handled by the cloud providers, Musk said in a post on X on Tuesday. He added that another supercluster will soon launch with an initial batch of 550,000 GB200 and GB300 chips.
I suppose one could argue this training isnt capex, but I was also under the impression that xAI was building sites for housing their AI.
Re: OpenAI raises $8.3B at $300B valuation
#58Given their current product offerings, I really don't see a way they could ever justify a $300B valuation unless they get everyone on the planet to subscribe to their $200/month plan. I'm calling it now: investors are gonna get burned hard on this one. Cause right now all they have is "well we are working on superintelligence" and to that I say "great, then what?". Even if they do make that breakthrough I don't see h…
> OpenAI’s business continues to surge. DealBook hears that the company’s annual recurring revenue has soared to $13 billion, up from $10 billion in June — and is projected to surpass $20 billion by the end of the year.
This is why.
Of course $300B still implies a lot of growth, but when you're growing 100% in 6 months at $10B in ARR, you can demand a lot.
Re: OpenAI raises $8.3B at $300B valuation
#59Given their current product offerings, I really don't see a way they could ever justify a $300B valuation unless they get everyone on the planet to subscribe to their $200/month plan. I'm calling it now: investors are gonna get burned hard on this one. Cause right now all they have is "well we are working on superintelligence" and to that I say "great, then what?". Even if they do make that breakthrough I don't see h…
There is A LOT of optionality to get different revenue streams that aren't strictly retail buying subs.
Whether they are able to do that, customer stickiness and the trade off of damage to the quality of their product by driving revenue remain the largest long term questions in my mind (outside of the viability of super intelligence).
Re: OpenAI raises $8.3B at $300B valuation
#60So OpenAI is running at a $13B ARR, meaning this is a ~23X valuation. I don't have a good read on margin. But this would imply massive growth assumptions which I struggle a bit to understand where they come from. (1) New customers new to AI or migrations from Claude/Perplexity/Google: The overwhelming majority of people already know about the offerings, leaving most new people to come from residual people who identif…
Sometimes the bet is not on the company but the industry. If you can argue the industry has room to grow 10x in terms of market cap, which is possible, then merely staying even in market share is a 10x growth.
Ai applications have not even scratched the surface, IMO. I don’t think it is unreasonable to see a world where, when AI gets strong enough to do senior level white collar work, like doctors or lawyers, AI companies build sub-companies to capture the end value of their AI products rather than the base value as a vertical integration tactic.
We are at a lull but AI value add is real and the ways that AI companies capture that value add is still very primitive.