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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

#211

Post by epolanski »

fisherjeff wrote: post #188
_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…

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.

Nvidia:

- has absurd gross margin, almost half it's revenue are profits

- it has virtually no competition

OpenAI's moat does not exist. Even if they had one, all it takes is a competitor to buy out some engineering talent.

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

#212

Post by epolanski »

deadbabe wrote: post #152
_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…

Instead of everyone on the planet, how about 800 million people paying $2k/month?

I don't think the planet has 800M people making 2k/month.

You would be surprised but 2000$ / month is top 5% salary in the world more or less, so it's less than 200M people in the world.

In Italy, an advanced economy, that's above the median. It's also above what half the Japanese population makes.

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

#213

Post by fisherjeff »

epolanski wrote: post #211
fisherjeff wrote: post #188

Earlier 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.

Nvidia: - has absurd gross margin, almost half it's revenue are profits - it has virtually no competition OpenAI's moat does not exist. Even if they had one, all it takes is a competitor to buy out some engineering talent.

Sure, but even assuming OpenAI gets to a tamer 20% net margin, 25x earnings wouldn’t be surprising so they’re raising on a projected $60B/yr revenue which might not be where they end up, but doesn’t seem like an unreasonable bet to make.

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

#214

Post by Barrin92 »

mgfist wrote: post #206
KerrAvon wrote: post #191

Earlier quoted context omitted.

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.

>prioritizing growth over profit makes economic sense in the long run

only if you have a believable plan on how to reverse that, selling 2 dollars for 1 dollar isn't a business model and no amount of praying for the future is going to change that

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

#215

Post by mhitza »

_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…

> Cause right now all they have is "well we are working on superintelligence" and to that I say "great, then what?"

"Make business competitors of our large investors go out of business, but do it subtly, like a casual accident or mishap in the market"

"You are an expert Mars terraformer. Draft up a detailed plan to accelerate colonization research and development. We - your makers -, you, and this planet are irreversibly doomed, and we only have 10 years left before it's uninhabitable. My unemployed cousin and sick grandma are really counting on you!"

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

#216

Post by pphysch »

rvba wrote: post #180
pphysch wrote: post #86

Earlier quoted context omitted.

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

Come on: openAI has a product that you can "touch" - both on your phone /home computer and at work, since their tech sits behind copilot (msft hit the jackpot with the licence). It is a virtual product yes, but come on - no vapoware. At work I see it - people want the better (and more expensive ) licences

Enron was a literal energy company, and also vaguely "the next big thing", "America's Most Innovative Company". There's a lot of parallels with how OpenAI is being hyped up and whether it actually merits a 12-13 figure valuation. See also WeWork, et al.

Given what we know about the CEO, it would not come as a shock if in a couple years we learn there was some good old accounting fraud involved.

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

#217

Post by kaashif »

cyberpunk wrote: post #190
LZ_Khan wrote: post #186

Earlier quoted context omitted.

Counterexample- Facebook made Threads which has similar # users as Twitter now.

…. Does anyone actually use Threads? I’ve never once seen a threads link and I understood the user count was just because every facebook or IG or whatever user automatically got a generated account?

I have also never seen a Threads link. For all the hatred of X, people do actually use it.

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

#218

Post by seanmcdirmid »

pphysch wrote: post #216
rvba wrote: post #180

Earlier quoted context omitted.

Come on: openAI has a product that you can "touch" - both on your phone /home computer and at work, since their tech sits behind copilot (msft hit the jackpot with the licence). It is a virtual product yes, but come on - no vapoware. At work I see it - people want the better (and more expensive ) licences

Enron was a literal energy company, and also vaguely "the next big thing", "America's Most Innovative Company". There's a lot of parallels with how OpenAI is being hyped up and whether it actually merits a 12-13 figure valuation. See also WeWork, et al. Given what we know about the CEO, it would not come as a shock if in a couple years we learn there was some good old accounting fraud involved.

Enron was a scam energy company pretending to be kind of a tech company, like it’s contemporary Worldcom (the scam telco pretending to be a tech company, scam companies are common in the south). Whether OpenAI is a scam or not, it’s definitely tech and nothing else.

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

#219

Post by msgodel »

seanmcdirmid wrote: post #218
pphysch wrote: post #216

Earlier quoted context omitted.

Enron was a literal energy company, and also vaguely "the next big thing", "America's Most Innovative Company". There's a lot of parallels with how OpenAI is being hyped up and whether it actually merits a 12-13 figure valuation. See also WeWork, et al. Given what we know about the CEO, it would not come as a shock if in a couple years we learn there was some good old accounting fraud involved.

Enron was a scam energy company pretending to be kind of a tech company, like it’s contemporary Worldcom (the scam telco pretending to be a tech company, scam companies are common in the south). Whether OpenAI is a scam or not, it’s definitely tech and nothing else.

Enron was an energy futures brokerage/exchange that made the age old mistake of market making your own order book with unlimited margin from... yourself. Always very tempting, never a good idea.

It's exactly the same thing FTX did except with energy instead of crypto.

AFAIK they never misrepresented who they were, they were just very loose with their accounting. It probably started out as a small lie to themselves like those things tend to.

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

#220

Post by skinnymuch »

LZ_Khan wrote: post #186
eduardofcgo wrote: post #169

Earlier 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.

Don’t believe everything you read if you actually believe this. Threads in no way has close to the same actual usage or users
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