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OpenAI raises $8.3B at $300B valuation

nytimes.com

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Re: OpenAI raises $8.3B at $300B valuation

#71

Post by sameermanek »

ahmedhawas123 wrote: post #43
lelanthran wrote: post #28

Earlier quoted context omitted.

> The thing that people are missing is that openai is a platform like google's, and there are a million different businesses they can expand into. That should make it easy for them to choose one and start already, then. I wonder why they haven't started. /s

Exactly my point! They're up against thousands of founders who are moving on domain specific use cases faster

I havent seen a single case apart from coding where end user has appreciated a clanker integration into their software!

Re: OpenAI raises $8.3B at $300B valuation

#72

Post by an0malous »

_fat_santa wrote: post #52

Given 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…

They’re going to sell to the military, that’s why they hired the former NSA director into their board. The current state of AI is a perfect mass surveillance technology.

Re: OpenAI raises $8.3B at $300B valuation

#73

Post by vessenes »

_fat_santa wrote: post #52

Given 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…

Startup-land valuations are for PR. The real negotiation is in the discount and the cap, warrants, etc.

That $8.3b came in early, and was oversubscribed, so the terms are likely favorable to oAI, but if an investor puts in $1b at a $300b valuation (cap) with a 20% discount to the next round, and the company raises another round at $30b in two months; good news: they got in at a $24b price.

To your point on Anthropic and Google; yep. But, if you think one of these guys will win (and I think you have to put META on this list too), then por que no los quatro? Just buy all four.

I'll call it now; they won't lose money on those checks.

Re: OpenAI raises $8.3B at $300B valuation

#75

Post by jononor »

lelanthran wrote: post #28
empath75 wrote: post #22

Earlier quoted context omitted.

Think about how much money openai could make _just_ by getting referrals for agentic work flows (ie: help me plan my vacation). The thing that people are missing is that openai is a platform like google's, and there are a million different businesses they can expand into.

> The thing that people are missing is that openai is a platform like google's, and there are a million different businesses they can expand into. That should make it easy for them to choose one and start already, then. I wonder why they haven't started. /s

They have started. Their strategy is just for others to build it on top of their platform. And not build one, but hundreds of businesses. Much faster way to grow. Why retain 100+ internal product/integration teams when you can have 100+ external teams that will pay you and do the building, the trying and failing, in each niche.

The things that actually work out you can just buy or outcompete later. But that is another phase, perhaps 1 decade from now. Right now it is about starting alll the snowballs.

Re: OpenAI raises $8.3B at $300B valuation

#76

Post by shepherdjerred »

jstummbillig wrote: post #46
halfmatthalfcat wrote: post #21

Earlier quoted context omitted.

Because.

I guess it's obvious why anyone should be delighted to learn or care at all that a random set of engineers are now getting a relatively bigger share of all the money in the world.

Because this is a site for engineers

Commenters are going to prefer things that benefit engineers even if it’s not themselves

Re: OpenAI raises $8.3B at $300B valuation

#77

Post by v5v3 »

Workaccount2 wrote: post #69
ahmedhawas123 wrote: post #15

So 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…

Tech people and their friends are like 1% of the population. Go out on the the street of Anytown in any western country, and people know "ChatGPT". A friend of mine is a teacher, and told me that at a recent school board meeting there was discussion about implementing AI into the learning curriculum. And to the board, "AI" and "ChatGPT" were used interchangeably. There was no discussion of other providers or models,…

More than just tech people on X and they all know Grok.

I imagine Meta users know Llama too?

Re: OpenAI raises $8.3B at $300B valuation

#78

Post by MangoCoffee »

_fat_santa wrote: post #52

Given 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…

>I'm calling it now: investors are gonna get burned hard on this one.

I'm in my late 40s. I'm Gen X. I lived through the glory days of the dotcom boom, when investors got burned for tons of money. But from the ashes of those bullshit companies, we got Amazon, Google, etc., which made investors rich beyond belief.

SoftBank’s Masayoshi Son made a bet on Alibaba ($20 million, its stake now worth $72 billion), and he’s been living off that wealth ever since. I haven’t seen him make any good bets lately. investors don’t really care if 100 of the shit they throw don’t stick because all they need is just one.

Re: OpenAI raises $8.3B at $300B valuation

#79

Post by jsnell »

ahmedhawas123 wrote: post #15

So 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…

Information retrieval for consumers is an existing high margin $250B/year business at a minimum (search ads revenue). That market is being disrupted before our eyes. That's 20x right there. There's going to be fierce competition and OpenAI is by no means guaranteed it, but surely they have more than just a puncher's chance.

The ad-monetized consumer market is funny in that they tend to be winner take all. Nobody can compete on price, because the ads go where the users are, and the users don't pay. And preferences are sticky, after making a choice, the users don't switch just for incremental improvements. So

The software development industry is likewise well in the process of being disrupted. LLMs for programming market seems to have grown from nothing to >$10B in a year. And the software development market is hundreds of billions / year, if you just consider the employment costs. We don't know exactly how this will play out, but again there's at least an order of magnitude more growth available there.

The above two are just the places where the impact is already obvious and it's clear that we don't need to assume any additional increase in capabilities. But an increase in capabilities seems really likely. Even if it turns out that we're right now on the cross-over of the sigmoid, and the asymptote won't be ASI or even AGI, a large proportion of knowledge work is also at risk. And then the addressable market is trillions if not tens of trillions.

I know this is hand-wavy, apologies for that. Doing this kind of analysis properly is both hard work and would require specialized data sources. But I think that's the general intuition for why high valuations for frontier labs are justifiable (and the same justification for bigtech capex). It's a lottery ticket with good odds for redistributing existing markets, as well as another set of lottery tickets for some set of probable markets, though we don't know exactly which.

With AGI or ASI, the addressable market is all economic activity, and at that point basically anything is justifiable.

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