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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

#261

Post by Western0 »

raincole wrote: post #230
ahmedhawas123 wrote: post #15

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…

Ads. They're going to sell ads. It's a bit hard to imagine how else they justify the valuation. Even if people look for answers from ChatGPT instead of Google, most people still won't pay $20/mo for it, let alone $200/mo. Average people don't pay for Google search and I've never seen any sign telling they would be willing to pay for it.

But they choose products suggested by Google or OpenAI, and manufacturers already pay these companies a lot of money. AI will force us, it will manipulate us. It already chooses what we see in online stores for us. This will continue.

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

#262

Post by kevinventullo »

dgb23 wrote: post #63

From online discourse and talking to people in different sectors that are impacted by "AI", I feel like there is great uncertainty, incredible hype and doomerism at the same time. My intuition is that we're in a huge tech bubble that will correct at some point. I don't know when that is or how severe it will be. But why should this tech hype cycle be qualitatively different from any of the others?

I mean which hype cycle?

We talk about the dotcom bubble, in which there were of course growing pains in figuring out what makes a viable internet-based business, but at the end of the day that era did produce multiple trillion-dollar companies.

Then you have the crypto bubble which really seems to be shaping up to be a nothing burger.

As for today, I think LLM’s are already pretty clearly useful, and they seem to be getting more capable with each passing year. In principle, these models are just the core foundations, while a wide variety of applications are in the process of being fleshed out. I think the jury is still out on how disruptive and effective these applications will be, both from a business/PMF perspective, but also in terms of the raw capabilities.

So take something like Harvey AI. They just raised a round at a $5B valuation, despite having an annualized revenue of just $75M as of April. So is that overinflated? Well, the total Legal Services market has a valuation of about $1T, and given how much legal work is incredibly laborious reading, analyzing, and writing text, (things which LLM’s are already pretty good at), it doesn’t seem ridiculous on the face of it that a Legal-focused LLM product couldn’t add 0.5% worth of efficiencies/value.

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

#263

Post by throwaway6612 »

ac29 wrote: post #175
hu3 wrote: post #133

Earlier quoted context omitted.

SpaceX is unique. OpenAI is one of many.

SpaceX has a price advantage over their competitors, not a capability advantage. Putting things in orbit has been possible for ~70 years

Cessnas have a price advantage over Boeings, not a capability advantage.

Putting things in air has been possible for ~120 years.

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

#264

Post by kibwen »

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'.

This isn't a rebuttal to any of the above criticisms. You appear to have completely misunderstood the existential risks that OpenAI faces here.

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

#265

Post by famouswaffles »

ath3nd wrote: post #260
famouswaffles wrote: post #192

Earlier quoted context omitted.

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.

Google was unprofitable for some time yes. I don't understand the obsession with the 'no profitability path in sight'. It's nonsensical. Their reported loss numbers are really low for a service with that many users. Open AI don't have to do a lot to be profitable, ads would be enough.

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

#266

Post by vickychijwani »

moralestapia wrote: post #259
vickychijwani wrote: post #227

Earlier quoted context omitted.

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.

Just holding Nasdaq 100 ETFs is enough? People get impressed by "doubled my money" but forget that the most important question is - how much time did it take? Even a super safe asset with 3% returns will double your money... in 24 years.

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

#267

Post by famouswaffles »

kibwen wrote: post #264
famouswaffles wrote: post #192

Earlier quoted context omitted.

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'.

This isn't a rebuttal to any of the above criticisms. You appear to have completely misunderstood the existential risks that OpenAI faces here.

Well you call this instance brand genericity instead of brand loyalty and hinge your argument on a past situation that doesn't really have any resemblance to this one.

Gemini is a google default so why isn't it used anywhere near a much as chatGPT ?

Meta has stuffed their llama model into Instagram, Whatsapp, Facebook and god knows what so why isn't it used anywhere near as much as chatGPT ?

In all the time these players pushed their apps and models to their billions of users, chatGPT's userbase has been growing massively.

Clearly people do care about using chatGPT and specifically chatGPT and what would be the 'existential crisis' by the incumbent players has come and gone, with Open AI unscathed.

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

#268

Post by ath3nd »

famouswaffles wrote: post #265
ath3nd wrote: post #260

Earlier quoted context omitted.

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

Google was unprofitable for some time yes. I don't understand the obsession with the 'no profitability path in sight'. It's nonsensical. Their reported loss numbers are really low for a service with that many users. Open AI don't have to do a lot to be profitable, ads would be enough.

> Open AI don't have to do a lot to be profitable, ads would be enough.

Yeah man, absolutely! Ads can pay for all of it!

> It's nonsensical

Yep, wanting a business to be profitable before investing in it, or at least to show that it could be profitable by providing a plan and timeline to profitability, is too much to ask for nowadays. Of course companies can be successful and great without any clear path to profitability, hype and enthusiasm are enough, just look at the great success of WeWork and Adam Neumann!

Who are we to doubt that? Just keep repeatedly giving couple of trillions to Sama and all will be okay, AGI is just behind the corner, trust him bro.

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

#269

Post by famouswaffles »

ath3nd wrote: post #268
famouswaffles wrote: post #265

Earlier quoted context omitted.

Google was unprofitable for some time yes. I don't understand the obsession with the 'no profitability path in sight'. It's nonsensical. Their reported loss numbers are really low for a service with that many users. Open AI don't have to do a lot to be profitable, ads would be enough.

> Open AI don't have to do a lot to be profitable, ads would be enough. Yeah man, absolutely! Ads can pay for all of it! > It's nonsensical Yep, wanting a business to be profitable before investing in it, or at least to show that it could be profitable by providing a plan and timeline to profitability, is too much to ask for nowadays. Of course companies can be successful and great without any clear path to profitabi…

OpenAI reportedly made a loss of $5B in 2024. By 2024's end they had ~300M WAUs, most of them free and not monetized in any way whatsoever.

To be profitable, they'd need to monetize those free users for an average of $17/year or $1.5/month.

Do you realize how low that is ? Yes, ads even implemented in an uninspiring fashion would more than cover that. With some thought into it ? Well, You don't need to be a genius to see the potential of directly weaving paid recommendations naturally into conversations when appropriate.

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

#270

Post by derwiki »

cactusplant7374 wrote: post #161
amradio1989 wrote: post #147

Pretty insane valuation. It may pay off, it may not. Google search was vastly superior to its competitors. I don't think ChatGPT has that kind of edge. This is a monopoly kind of valuation where no monopoly exists. Its like paying Microsoft billions for Internet explorer. Personally I believe the future of AI models is open-source. The application of these models will be the real revenue driver.

How would an average person even tell if ChatGPT was better than its competitors? Most people aren't running enough prompts every month to even care. Everyone knows ChatGPT and no one knows its competitors. It's going to stay like that.

I reach for ChatGPT, but if I’m on a Google property and they shove Gemini in my face, I use Gemini.

Memories are the biggest pull for me to keep coming back to ChatGPT, but I can’t imagine that’s a big moat.

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