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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

#81

Post by lelanthran »

_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…

Firstly, the $200/m plan is at a loss, they'll make a profit on PAYG tokens, not plans.

Secondly, this is looking very risky: they are at the bottom of the value chain and eventually they'll be running on razor thin margins like all actors who are at the bottom of the value chain.

Anything they can offer is doable by their competitors (in Google's case, they can even do it cheaper due to ow ing the vertical which OpenAI doesn't own).

Their position in the value chain means they are in a precarious spot: any killer app for AI that comes along will be owned by a customer of OpenAI, and if OpenAI attempts to skim that value for itself that customer will simply switch to a new provider of which there are many, including, eventually, the customer themselves should they decide to self host.

Being an AI provider right now is a very risky proposition because any attempt to capture value can be immediate met with "we're switching to a competitor" or even the nuclear "fine, we'll self host an open model ourselves".

We'll know more only when we see what the killer app is, when it eventually comes.

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

#83

Post by scottyah »

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.

ah, money is not a fixed resource. It is a made up system to track how much value people/groups are adding to the world. "share of all the money in the world" is a frequently quoted bad mental model, typically from people trying to bring others down

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

#84

Post by sollewitt »

v5v3 wrote: post #74

What does OpenAI have over XAI to make such a difference in valuation? XAi includes x/twitter and lots of hardware and is valued at $113 billion https://www.eweek.com/news/elon-musk-xai-valuation-debt-pack...

I think _not_ having Elon Musk is worth a couple of hundred billion in 2025, the guy has become a random liability generator.

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

#85

Post by [deleted] »

lelanthran wrote: post #81
_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…

Firstly, the $200/m plan is at a loss, they'll make a profit on PAYG tokens, not plans. Secondly, this is looking very risky: they are at the bottom of the value chain and eventually they'll be running on razor thin margins like all actors who are at the bottom of the value chain. Anything they can offer is doable by their competitors (in Google's case, they can even do it cheaper due to ow ing the vertical which Ope…

[deleted]

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

#86

Post by pphysch »

mgfist wrote: post #58
_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…

> 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.

Enron was also "growing" a lot when it was in full "paper tiger" mode.

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

#87

Post by skeptrune »

_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…

What are you talking about? All they have to do is sell ads at this point

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

#88

Post by peab »

svantana wrote: post #68
_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…

> get everyone on the planet to subscribe to their $200/month plan Not necessarily. Google is valued 7x that and most people don't pay them anything. They just make ridiculous money from ads for insurance and loans. Meanwhile, ChatGPT is the #1 app and the #5 website, which should really worry google (and it does by all accounts).

yeah, it's pretty easy to see how openai could steal those high paying queries from Google, if they continue growing at this rate.

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

#89

Post by hodder »

I'd give my left nut to buy into OpenAI at this valuation. 300B is peanuts compared to where it would trade publicly, FCF and net income be damned. The growth and the optionality are there when you bring a tool this valuable to the world. This is destined to trade over 2T rapidly imo. PLTR (granted imo a bubble) trades above that, and PLTR is basically a glorified IBM/Accenture business model with mediocre growth.

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

#90

Post by jstummbillig »

shepherdjerred wrote: post #76
jstummbillig wrote: post #46

Earlier quoted context omitted.

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

a) That kind of group identity think seems super cringe

b) If a particular set of engineers works to put "their people" out of a job, I am even more confused about the sanity of those willfully subscribing to the idea.

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