They haven’t released a new model in ages and their research seems dead in the water. People are going to get burned on all these meme stocks.
Didn’t they promise GPT-5 this month? The one that got gold on IMO?
OpenAI raises $8.3B at $300B valuation
201–210 of 294 posts
Re: OpenAI raises $8.3B at $300B valuation
#202Earlier quoted context omitted.
Just picking a semi-related stock, NVDA trades at ~30x gross revenue, so a $300B "only" translates into ~$10B in revenue. And OpenAI can ask for a better multiplier because I'm sure they're forecasting a ton of growth and a ton of cost savings.
NVDAs valuation is insane. At 30X revenue, they could double sales and reduce expenses to zero and they'd still need a story about future growth to justify the valuation. Consider this: Nvidia doesn't do the manufacturing, just the engineering. If we had AI super intelligence, you'd just need to type "give me CUDA but for AMD" into chatGPT and Nvidia wouldn't be special anymore. Then someone at TSMC could type "desig…
Super intelligence doesn't make it real it just knows how. You can't type "bring me a moon rock" to it.
Re: OpenAI raises $8.3B at $300B valuation
#203Re: OpenAI raises $8.3B at $300B valuation
#204Earlier quoted context omitted.
OpenAI valued at 300B will never be able to produce the same products "wrappers" that these 5 people startups are making. Same reason Facebook could not make Instagram, of Jira could never make bootcamp for example.
Counterexample- Facebook made Threads which has similar # users as Twitter now.
Didn't it came out recently that those numbers were bugus, since basically every Instagram account must have a Threads account, and those are not actual active users?
Re: OpenAI raises $8.3B at $300B valuation
#205Earlier quoted context omitted.
Maybe the better analogy for LLM businesses isn’t SaaS but more like power generation. If AI really becomes that ubiquitous then OpenAI capturing that value is no less ridiculous than ComEd capturing the value of every application of electric power.
What OpenAI has is the know-how in developing new models and training them efficiently. That's a kind of value they can provide even in a world where open-sourced local models are in common use.
So they become a consultancy?
Re: OpenAI raises $8.3B at $300B valuation
#206Earlier quoted context omitted.
Irrelevant at this stage.
the problem with the post-dotcom market in a nutshell. everything’s a bubble. bubbles have more durability now. until they don’t.
Sure, but this mentality always would result in missing out on the trillion dollar companies that followed these types of growth curves.
Surely you must understand that prioritizing growth over profit makes economic sense in the long run for a company like OpenAI.
Re: OpenAI raises $8.3B at $300B valuation
#207I'm curious about how something like this affects compensation? OpenAI's compensation model is generally to use profit share instead of equity share. PPUs (Profit Participation Units) rather than RSUs (Restricted Stock Units).
I found the answer. Comp equity offers are based on the previous valuation at the last tender event. So now would still be a really good time to join OpenAI. I'm guessing this raise is likely a leading indicator of what that will trend towards in future.
Re: OpenAI raises $8.3B at $300B valuation
#208Re: OpenAI raises $8.3B at $300B valuation
#209Given 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…
OpenAI will never be profitable selling raw tokens.
They need the application layer that allows them to sell additional functionality and decouple the cost of a plan from the cost of tokens. See Lovable, they abstract away tokens as "credits" and most likely sell the tokens at a ~10x markup.
The idea of running a company that sells tokens is like starting a company that sells MySQL calls.
Re: OpenAI raises $8.3B at $300B valuation
#210Earlier quoted context omitted.
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…
The real revenue opportunity for OpenAI is advertising. More than 25% of Americans use ChatGPT instead of Google, and OpenAI has already announced partnership with Shopify to directly list products. But for now they are focused on market share. Google does not really own the complete AI stack, NVDA is extracting a lot of the value there. Google has two other impediments to doing what ChatGPT does. Googles entire busi…
I don't believe that 25% quote, at all.