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They Don't Have the Money: OpenAI Edition

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Re: They Don't Have the Money: OpenAI Edition

#11

Post by danpalmer »

The bubble is going to burst, if only because the growth in these numbers is obviously unsustainable – we just don't have trillions – and if the growth slows the hype dies. Maybe the current level can be stable, maybe the market will shrink, but the growth cannot continue.

When the bubble bursts who will survive? The existing, profitable, big tech companies will, if not without pain. The startup ecosystem will likely be decimated. But what about the in-betweens, OpenAI, Anthropic, etc? My guess is that Anthropic will sell to (or merge with) another profitable company and live on because they'll be relatively cheap for some excellent technology, but OpenAI might be too big for that, too expensive.

Re: They Don't Have the Money: OpenAI Edition

#12

Post by dkasper »

macintux wrote: post #10
pants2 wrote: post #2

Yes, their capex spending is mind-blowing. Astronomical. But OpenAI has also pretty much lived up to its promises so far. I don't see them straight up lying to investors the same way that Tesla does. Not only has OpenAI launched multiple viral products a year multiple years in a row, but their mission is to create God, so I think the TAM is pretty large.

I’m on a long, meandering road trip and I decided to start using the conversational feature in ChatGPT. Truly amazing stuff. Discussed some sights I’d want to see along the Natchez Trace (although perhaps unsurprisingly it did not anticipate that this time of year was not ideal for hearing and seeing waterfalls), told me about Meriwether Lewis’s bizarre death. Basically like holding a conversation with Wikipedia, whi…

Starlink roam solves that!

Re: They Don't Have the Money: OpenAI Edition

#14

Post by idiotsecant »

pants2 wrote: post #2

Yes, their capex spending is mind-blowing. Astronomical. But OpenAI has also pretty much lived up to its promises so far. I don't see them straight up lying to investors the same way that Tesla does. Not only has OpenAI launched multiple viral products a year multiple years in a row, but their mission is to create God, so I think the TAM is pretty large.

Progress has reached incremental, and started slowing past that. I'm not sure creating God is in the cards.

Re: They Don't Have the Money: OpenAI Edition

#16

Post by TrainedMonkey »

pants2 wrote: post #2

Yes, their capex spending is mind-blowing. Astronomical. But OpenAI has also pretty much lived up to its promises so far. I don't see them straight up lying to investors the same way that Tesla does. Not only has OpenAI launched multiple viral products a year multiple years in a row, but their mission is to create God, so I think the TAM is pretty large.

I think argument here is that anyone can build a business that converts $2 capital into $1 of revenue. Concur on enormous TAM, but given similar performance of competing models their only moat is ChatGPT brand*. This leaves building a God as the killer app... maybe that can work.

Note: owning a brand associated with the thing worked out pretty well for Google, so maybe it's enough.

Re: They Don't Have the Money: OpenAI Edition

#17

Post by mynegation »

quirkot wrote: post #13

Anyone with a Bloomberg terminal able to run how much free cash the top X companies in the fortune 500 generate? The amount of capital OpenAI is describing have to be a material % of all cash generated each year over the next 5 years.

Total FCF for top 500 by market cap is 2.56T

Re: They Don't Have the Money: OpenAI Edition

#18

Post by koakuma-chan »

macintux wrote: post #10
pants2 wrote: post #2

Yes, their capex spending is mind-blowing. Astronomical. But OpenAI has also pretty much lived up to its promises so far. I don't see them straight up lying to investors the same way that Tesla does. Not only has OpenAI launched multiple viral products a year multiple years in a row, but their mission is to create God, so I think the TAM is pretty large.

I’m on a long, meandering road trip and I decided to start using the conversational feature in ChatGPT. Truly amazing stuff. Discussed some sights I’d want to see along the Natchez Trace (although perhaps unsurprisingly it did not anticipate that this time of year was not ideal for hearing and seeing waterfalls), told me about Meriwether Lewis’s bizarre death. Basically like holding a conversation with Wikipedia, whi…

What is "the conversational feature'?

Re: They Don't Have the Money: OpenAI Edition

#19

Post by HexDecOctBin »

pants2 wrote: post #2

Yes, their capex spending is mind-blowing. Astronomical. But OpenAI has also pretty much lived up to its promises so far. I don't see them straight up lying to investors the same way that Tesla does. Not only has OpenAI launched multiple viral products a year multiple years in a row, but their mission is to create God, so I think the TAM is pretty large.

> their mission is to create God

What if this "God" deems it a sin to monetise him? Will OpenAI turn heretic to keep the revenue flowing and incur cyber-divine wrath? Or are investors pricing in omnipotency?

(see what happens when one speaks in ridiculous corpo-flowery language?)

Re: They Don't Have the Money: OpenAI Edition

#20

Post by afavour »

pants2 wrote: post #2

Yes, their capex spending is mind-blowing. Astronomical. But OpenAI has also pretty much lived up to its promises so far. I don't see them straight up lying to investors the same way that Tesla does. Not only has OpenAI launched multiple viral products a year multiple years in a row, but their mission is to create God, so I think the TAM is pretty large.

They have been doing great but an organization succeeding at its technical goals does not equal a successful business.

Early on they seemed like the only one in the game but there are many competitors today. Launching viral products is all very well but if they can’t monetize them they could even be harmful to their business outlook.

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