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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

#251

Post by Western0 »

_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…

There is simply too much money in the world and not enough products. Either this will cause inflation, or it will delay the introduction of inflation by playing with AI.

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

#252

Post by Western0 »

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…

It is difficult to host a model such as 617B locally.

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

#253

Post by woooooo »

jjani wrote: post #250
cyberpunk wrote: post #190

Earlier quoted context omitted.

…. 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?

As with most social platforms, it differs massively per country, it would help a lot if people here spent more time considering the diversity of the world.

Ok, but if we have to go looking for it, then its not exactly a juggernaut.

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

#254

Post by jbverschoor »

eastbound wrote: post #246
diamond559 wrote: post #229

Earlier quoted context omitted.

Except Google search keeps growing per their last earnings report. You'd think if 25% of Americans have switched to ChatGPT it would have hit the numbers by now...

We’re still in the period where people ask Google before reverting to ChatGPT. Wait until habits change.

For months now Google has provided AI results at the top of the page for every query, and quite frankly it’s really solid.

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

#255

Post by Western0 »

notfromhere wrote: post #91
lelanthran wrote: post #81

Earlier 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…

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.

A very good comparison. Why are electric companies and railways state-owned? Of course, not entirely. They have a string of private companies, but the core is state-owned and monopolistic. OpenAI will be like that. It is already flirting with the government to get the best access and be able to control the thinking of officials. Manipulation of officials and politicians. Isn't that beautiful and self-perpetuating profit?

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

#256

Post by ath3nd »

mgfist wrote: post #156
indigodaddy wrote: post #62

Earlier quoted context omitted.

And what's the profit on the 13B?

Irrelevant at this stage.

I like how you are thinking. When hype is involved, why should one bother with facts, timelines and reality.

Great, stable and successful companies like Enron, Wirecard, Theranos, FTX and WeWork are prime examples of that.

Note: I am not saying OpenAI is a fraud like the above, just saying that their valuation is as divorced from reality as Zuck's "Superintelligence is behind the corner" comment last week.

Their models are not largely better than other competitors', they haven't cornered the market, they are burning through money with no profitability in sight, Anthropic just cut their access to Claude (not relevant, just funny).

Come on, their most recent product announcements were:

- an office suite: https://www.computerworld.com/article/4021949/openai-goes-fo....

- a restricted, less powerful (hide-the-spoilers) version called "Study Mode": https://openai.com/index/chatgpt-study-mode/

It's just...there is nothing going on for them at the moment. The valuation is just wishful thinking, if we are looking at the facts.

We live in a crazy world, all one can do is buy some popcorn and enjoy the shitshow.

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

#257

Post by ath3nd »

Barrin92 wrote: post #214
mgfist wrote: post #206

Earlier quoted context omitted.

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

Mathematics don't matter. It's about what your guru of choice on X tells you to believe in.

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

#258

Post by ath3nd »

mgfist wrote: post #157
pphysch wrote: post #86

Earlier quoted context omitted.

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

Ok, and? Last I heard were talking about OpenAI, not Enron.

Surely you can spot the similarities if you try hard enough? If not, maybe we can ask ChatGPT about it (below is ChatGPT's "opinion" on the similarities between Enron and OpenAI):

Structural Complexity & Opacity:

- Enron was infamous for its convoluted corporate structure, which helped obscure financial realities.

- OpenAI has a similarly complex setup: originally founded as a nonprofit, it now operates through a for-profit arm with a structure that some critics say lacks transparency.

Investor Hype vs. Financial Fundamentals:

- Enron attracted massive investment based on future projections, not present performance. Its ventures, like NewPower Co., had no clients or revenue but were valued in the billions.

- OpenAI has been valued at over $300 billion despite not turning a profit and having no clear path to profitability. Critics argue this is reminiscent of Enron’s “vibes-based” valuation.

Leadership & Ethical Concerns

- Enron’s leadership was later revealed to have serious ethical lapses.

- OpenAI has faced scrutiny over leadership turnover and internal conflicts, raising questions about governance and long-term stability.

Grandiose Predictions:

- Both companies have been known for bold, sweeping claims about the future. Enron promised revolutionary energy solutions; OpenAI is at the forefront of AI’s transformative potential—but some worry the hype may be outpacing reality

Hope that helps :)

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

#259

Post by moralestapia »

vickychijwani wrote: post #227
jm20 wrote: post #171

It's so funny. Every single time a company raises a ton of money at a large valuation, the comments are always filled with "how do they justify this valuation" or "they aren't work X...because Y and Z do the same thing". VC math is pretty simple - at the end of the day, there's a pretty large likelihood that at least 1 AI company is going to reach a trillion dollar valuation. VCs want to find that company. OpenAI, wh…

Doubling your money in 10 years is < 7.2% per year compounded. With the risks involved here, I wouldn’t take that bet. There are safer assets that would return that much.

Which ones, so I can acquire them.

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

#260

Post by ath3nd »

famouswaffles wrote: post #192
kibwen wrote: post #160

Earlier quoted context omitted.

> When average people are asked to reach for AI, they reach for ChatGPT. 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…

Except Open AI happen to be the Sony in this case. 700M Weekly active users and the 5th most visited site on the planet, with no-one else close. I mean, it's pretty clear this is less 'Nintendo' and more 'Google'.

If Google was massively unprofitable and with no profitability path in sight, yeah, that's very much Google.
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