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OpenAI raises $110B on $730B pre-money valuation

techcrunch.com

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Re: OpenAI raises $110B on $730B pre-money valuation

#361

Post by grosswait »

dfp33 wrote: post #338
onlyrealcuzzo wrote: post #325

Earlier quoted context omitted.

> 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…

"If AI stopped progressing today, it would take probably a decade or longer for us to take full advantage of it." AI stopped progressing, or LLMs? I really dislike people throwing the term AI around.

For the purposes of their argument, I don’t think the distinction matters.

Re: OpenAI raises $110B on $730B pre-money valuation

#362

Post by phist_mcgee »

alecco wrote: post #93
aurareturn wrote: post #62

HN told me OpenAI was on the verge of collapse.

Nobody saw coming the huge demand for coding agents. Not even OpenAI or Anthropic themselves. Those were side projects just a year ago and now dominate token demand. And they keep rising.

Does anyone see the demand for coding agents that aren't subsided 90% by the AI company?

Re: OpenAI raises $110B on $730B pre-money valuation

#363

Post by g-mork »

aurareturn wrote: post #261
bandrami wrote: post #238

Earlier quoted context omitted.

I don't know that OpenAI specifically is the weak link but this definitely adds to the argument that the entire sector is a wash with the same three or four companies passing around the same $50B over and over. OpenAI is just the link that seems most likely to break first.

I've subscribed to a few AI tools for the last 3 years now. I'm someone who almost never subscribes to anything. I'm sure that $50b has my money in there somewhere.

Yep same, I'd sooner starve than cut my Anthropic sub

Re: OpenAI raises $110B on $730B pre-money valuation

#364

Post by mlinsey »

tsunamifury wrote: post #360
mlinsey wrote: post #348

Earlier quoted context omitted.

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

Maybe! Switching search engines is also very easy, and the top story on the front page is someone no longer using Google, but we know in practice almost nobody does that. As technologists we're much more likely to switch and know people who would switch.

Re: OpenAI raises $110B on $730B pre-money valuation

#365

Post by sp4cec0wb0y »

beernet wrote: post #327
bentt wrote: post #318

Someone 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

How many of those users are paying? Where is the profit? How many users will be willing to use ChatGPT if they had to pay? Might have to pull out the questions like its 2026.

Re: OpenAI raises $110B on $730B pre-money valuation

#366

Post by grosswait »

bentt wrote: post #318

Someone 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.

I can’t. I think they are one viral TikTok away from the pendulum swinging to Chat Gemini, which for most people, the no cost version is perfectly adequate

Re: OpenAI raises $110B on $730B pre-money valuation

#367

Post by rvnx »

metalliqaz wrote: post #342
Night_Thastus wrote: post #332

Earlier quoted context omitted.

They'll stay as long as it's cheap. The moment any attempt is made to raise the price, the number will crater.

Also when they start seeing real ads.

It started to get deployed: https://chatgpt.com/pricing/ it's called "ChatGPT Go"

    > This plan may include ads. Learn more 

    > When will ads be available in ChatGPT?
    We’re beginning in the US on February 9, 2026

    > Starting in February, if ads personalization is turned on, ads will be personalized based on your chats and any context ChatGPT uses to respond to you. If memory is on, ChatGPT may save and use memories and reference recent chats when selecting an ad.
You pay 8 USD / month and have higher limits and ads

Re: OpenAI raises $110B on $730B pre-money valuation

#368

Post by elictronic »

beernet wrote: post #327
bentt wrote: post #318

Someone 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

Are those users Locked in or are they treating the service like a commodity easily changed when the price goes up to stop hemorrhaging money.

Google worked as a free service because their backend was cheap. AI models lack that same benefit. The business model seems to be missing a step 2.

Re: OpenAI raises $110B on $730B pre-money valuation

#370

Post by rvnx »

mlinsey wrote: post #364
tsunamifury wrote: post #360

Earlier quoted context omitted.

Switching is super easy and people are doing it. There is no moat

Maybe! Switching search engines is also very easy, and the top story on the front page is someone no longer using Google, but we know in practice almost nobody does that. As technologists we're much more likely to switch and know people who would switch.

Same strategy as for search. Gemini is going be shoveled down the mouth of users and they just won't change the default.

On iOS with the Apple agreement, and on Android (though the question of hardware remains when considering beyond Pixel phones).

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