191–200 of 529 posts
I'm old enough to remember when companies worth $1 billion were called "unicorns." Now we have a company raising 122 times that? Valued at nearly 1000 times that...? At least they're throwing consumers a bone via the ARK deal. It's crazy how little AI exposure is available to anyone who isn't already wealthy and/or connected.
I can't help but think building an "everything" app is so.. both unbelievably ambitious, and a folly. I am not personally convinced that people want all the things that this super app purports to do. I am from a generation that still sits behind a desktop computer when making "big purchases." I can't even buy a flight on my phone. I am so much less likely to want to have an AI agent do that for me. Then the idea that…
I've worked for 3 different startups where the CEO at one point gave us the talk of "we're building a super app". Admittedly openAI is in a better position to do it, but not by much. Everyone wants to be WeChat in china. No user wants that from them.
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Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] :-\ Valuations are not as crazy, but I bet there'll going to be a lot of demand in the coming decade, unfortunately. Chip production, too, of course, but it's overflowing with money already, apparently. It's growing though, because there are real actual shortages of stuff like RAM and SSDs, there's money to be…
> Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] Only viable if you’re okay with the ethical implications of funding war.
This is, sadly, not theoretical, and I'm afraid we'll soon see more of such choices, not fewer.
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I do wonder how much of Amazon's $50B share (per last press release) is in AWS credits rather than money in the bank.
Probably a lot? It would be much more tax-advantageous to do it this way, $50B worth of credits != $50B worth of spend on Amazon's part, and they might meet in the middle about how much equity that translates to.
No, they didn't raise $122B as the HN title implies. A big chunk of that $122B is a "maybe" that depends on various things that need to happen in the future. Oh, man... I can't wait to see where this is going. Might not be pretty after all.
Michael Burry called out this structural manipulation play recently:
https://www.benzinga.com/markets/tech/26/03/51248353/michael...
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>> To finish, I do just sort of straight up hate the idea that we're comparing this moment to the invention of electricity. It's on the face of it absurd. Do you feel that any technology is comparable in it’s impact?
Most of modern medicine, by which I mean each discovery and invention in their own right, stand alongside electricity. Particularly vaccines. AI isn’t there yet. You could turn off AI tomorrow and there’d be a shock but people would quickly switch back. You could not do the same for electricity, medicine, combustion engines (or steam engines/turbines), computers, the internet, modern building materials, etc. You try…
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Two reasons. They somewhat broke even, and kept getting investment. The potential for quasi monopoly was obvious. Openai can't claim either.
How did Uber somewhat break even? They lost $34b before making a profit. Uber was only on a path to monopoly in the US, not world wide. It’s lost to local competitors in most countries. And it can get disrupted by self driving cars soon. OpenAI’s SOTA LLM training smells like a natural monopoly or duopoly to me. The cost to train the smartest models keep increasing. Most competitors will bow out as they do not have t…
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That’s logically inconsistent. If the company was performing poorly enough that they couldn’t meet their funding milestones from a previous round, they’re not going to have an easy time raising the same money in a future round. The milestones aren’t a hard-stop that forbids the previous funding round participants from providing the money if they still choose. It’s just an out.
What I am saying is that if you do meet the milestones from your previous round, you're going to have an easy time fundraising anyway, so funding contingent on milestones isn't that different than just saying "well, if we need more money we can do another round"
You're also ignoring that the market changes frequently. If you only raised as much money as you needed for the next 4-6 months with plans to re-raise all the time, you'd have to constantly be sizing your growth plans up or down based on how the market felt about startup investing that month.
Imagine the company having to either do speed hiring or large layoffs every few months to adjust to the size of the fundraising round they were able to get this time around.
Nothing about what you're suggesting would be easier, or easy at all
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Note that even that "money in the bank" of traditional venture firm is not really money in the bank. VC, PE, and hedge fund managers usually don't have all the cash for the fund sitting in the bank at all times. Rather, their agreement with the LPs that fund the fund is structured as a series of capital calls: it gives the fund the right to demand that their LPs deposit cash in their bank accounts within 10-30 days,…
When a startup raises money without contingencies, typically they do get a large amount of money in the bank all at once.
The first rule of tautology club is...
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I've wondered how many announced fundraising rounds were like this. It's in everyone's interest (VCs and entrepreneurs) if the message to the outside world is "this company is amazing so they've raised a boatload of cash". But VCs might not want to give it all up front, or unconditionally. It makes it hard to say what the valuation of a company is. If the milestones are unlikely to be hit, then it's anyone's guess.
This is a common structure. It's confusing to people who don't know finance or startups when they first see it. Even VCs don't get all of their fund money delivered into their bank account when they raise a funding round. It's inefficient and undesirable for everyone involved to have to move all of the money up-front, at once. If you talk to anyone in startup funding or finance they'll be familiar with the term "capi…