If OpenAI is Pied Piper, who is Russ Hanneman in all this?
I would vote for Once-CEO-Then-not-then-CEO-Again Hypeman Sam Altman
I like to point out that he was fired for egregious dishonesty.
OpenAI raises $110B on $730B pre-money valuation
351–360 of 620 posts
Re: OpenAI raises $110B on $730B pre-money valuation
#352Someone please explain how OpenAI is not Netscape 2026. They had first mover advantage but no network effect, no moat, and are racing to stay ahead of infinitely resourced incumbents.
They are in bed with Microsoft not against them. And Nadela is not the sharpest knife in the drawer unlike Bill Gates.
Re: OpenAI raises $110B on $730B pre-money valuation
#353Earlier quoted context omitted.
Maybe: “ok I’m lazy, the app is preinstalled on my phone and it’s free, there are some ads but ok”
Isn't that the 'bull case' for Gemini?
Have the same feeling, they have Gemma-3 that is preparing to be on-device stuff, and getting deployed on iPhone if I understand it right.
Then it can be something along the lines of "subscribe to Google XXX or Apple +++ and have 'unlimited' cloud requests"
Re: OpenAI raises $110B on $730B pre-money valuation
#354$730B pre-money for a company where each model is roughly 2x profitable on its own, but each next model costs 10x the last. The whole thing only works if scaling keeps delivering. Research (Sara Hooker et al.) is not encouraging on that front, compact models already outperform massive predecessors on downstream tasks while scaling laws only predict pre-training loss reliably. Wrote about both the per-model math and t…
> each model is roughly 2x profitable on its own, but each next model costs 10x the last. The whole thing only works if scaling keeps delivering. This is a decent argument, but it's not the death knell you think. Models are getting 99% more efficient every 3 years - to get the same amount of output, combined with hardware and (mostly) software upgrades - you can use 99% less power. The number of applications where AI…
We said all the same shit about VR, dude. Even had a global pandemic show up to boost everyone's interest in the key market of telepresence. Turns out the merry go round can stop abruptly.
Re: OpenAI raises $110B on $730B pre-money valuation
#355Re: OpenAI raises $110B on $730B pre-money valuation
#356Earlier quoted context omitted.
How will they make money on their product exactly? To the tune of being worth nearly a trillion dollars? There is no guarantee that inference will go down, we’ve seen some improvement with cheap models, but they aren’t what people want, and otherwise models stay expensive to run and use
Inference is already profitable (training is not)
[citation needed]
OpenAI have made this claim and maybe it is with API pay-per-use (there's also good evidence eveb that is not if you dive into how much a rack of B200s cost to operate), but I'd be very sceptical that the free, $20 or $200 a month plans are profitable.
Then the questions are if the market will bear the real cost and if so how competitive OpenAI are with Google when Google can do what Microsoft did to Netscape and subsidize inference for far longer than OpenAI can.
Re: OpenAI raises $110B on $730B pre-money valuation
#357Someone please explain how OpenAI is not Netscape 2026. They had first mover advantage but no network effect, no moat, and are racing to stay ahead of infinitely resourced incumbents.
How are ~1B active users not "moat"? Might have to pull out the "Haters gonna hate" like it's 2007
700 million and declining with no clear story to levering either the attention economy or paying
Re: OpenAI raises $110B on $730B pre-money valuation
#358Hard not to hear the word “bailout” in my head when I see this many billions being tossed around.
At least investors like Amazon can afford to lose their investment ($50 billion). That would be like a normal person losing a few thousand dollars. It hurts, but life would go on.
That’s still $100B unaccounted for, and I’m pretty sure Amazon would expect fair treatment if other investors get a bailout. More likely, OpenAI is the one to receive the bailout, likely at the behest of the bigger investors, Amazon included.
Re: OpenAI raises $110B on $730B pre-money valuation
#359HN told me OpenAI was on the verge of collapse.
For Nvidia's part they're just giving money to one of their largest customers. They make money back even if they "lose" the bet
It's like government XX giving "help" or "grants" to countries at war so they can purchase weapons from XX.
Re: OpenAI raises $110B on $730B pre-money valuation
#360Earlier quoted context omitted.
Not GP, and not saying I agree with them, but it may be worth remembering that Netscape had 90% market share at one point. Active user count may not be the moat you imagine.
Adoption of web browsers was also much lower when Netscape was dominant. 90% marketshare is less meaningful if you're only 1% of the way to the potential market size. Peeling away users who talk to ChatGPT every day is very possible, but harder than getting someone whose never used an LLM before (but does use your OS, browser, phone...) to try yours first. I think the even better analogy than browsers is search engin…
Switching is super easy and people are doing it.
There is no moat