151–160 of 294 posts
IMHO, investors are happy to pay 23x ARR because Nvidia trades at 29x EV/sales and arguably OpenAI should support a higher multiple given it is a smaller entity with more headroom for growth.
That would imply that OpenAI has less competition to fear than Nvidia, which I’m doubtful is the case.
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…
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…
This reminds me of Amazon choosing to sell products that it knows are doing well in the marketplace, out-competing third party sellers. OpenAI is positioned to out-compete its competitors on virtually anything because they have the talent and more importantly, control over the model weights and ability to customize their LLMs. It's possible the "wrapper" startups of today are simply doing the market research for OpenAI and are in danger of being consumed by OpenAI.
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…
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.
Earlier quoted context omitted.
I think it was hyperbole
Obviously. But if you look at the math, 20 million people paying $200/month justifies a $300b valuation for a saas business, so saying $300b isn't justified because it's a big number is lazy thinking.
I'm still very curious whether OpenAI is turning a profit on any of their services.
Earlier quoted context omitted.
> 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.
And what's the profit on the 13B?
Earlier quoted context omitted.
> 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.
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…
Let's not forget this company was founded by basically stealing seed investment from the non-profit arm, completely abandoning the mission, crushing dissent in the company and blackmailing the board. Sam will do anything to succeed and they have the product and powerbase to do it.
Earlier quoted context omitted.
> The current state of AI is a perfect mass surveillance technology. How? Are you just going to ask the LLM about who is doing the crime? OpenAI is not an "AI company", it's an "LLM company".
You ask it to do the things that human analysts already currently do with the vast amounts of text, image, and video data they collect but at an unprecedented scale. You can extract what people are talking about, identify people, weapons, or objects in images, extract addresses, license plate numbers, or other identifying references. It can probably even detect when people are using coded language that won’t trigger…
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,…
No, average people are nowhere near that tech-savvy. Just because every mom in the 90s called every video game console a "Nintendo" did not mean that Sony didn't mop the floor with Nintendo in that era. This isn't brand loyalty, it's brand genericity. Other than, say, Replika-style users who have formed an emotional bond with a certain style of chatbot, no average joe on the planet gives a damn whether the LLM powering their chat is provided by OpenAI or Google or etc. They'll use whatever's in front of them and most convenient, and unlike Google, Apple, or Microsoft, OpenAI doesn't own the platform that establishes the crucial defaults that nearly no user ever changes.