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OpenAI closes funding round at an $852B valuation

cnbc.com

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Re: OpenAI closes funding round at an $852B valuation

#301

Post by SilverElfin »

singpolyma3 wrote: post #292
SilverElfin wrote: post #195

Earlier quoted context omitted.

With NASDAQ and NYSE looking to reduce the timelines for new public companies to be included into indices (“fast entry” rule), I have a feeling that OpenAI and SpaceX and Anthropic are mostly looking to dump their inflated shares into the public’s retirement accounts by force. Michael Burry called out this structural manipulation play recently: https://www.benzinga.com/markets/tech/26/03/51248353/michael...

Retirement accounts aren't required to buy a stick just because it's listed. ... probably will though

Retirement accounts already own funds and those in turn are often tied to the underlying index. If the time to being included in an index is reduced, they end up being automatically bought sooner. And that keeps their price from collapsing artificially.

Re: OpenAI closes funding round at an $852B valuation

#302

Post by pembrook »

mrdependable wrote: post #36

Funny how quickly they have become like every other tech company. There is basically no hint of OpenAI the non-profit anymore. Edit: Why did this go from their press release to a news story?

Sir, I'm sorry to be the one to tell you this. But you've been in a coma since 2022 after a severe car accident.

It's now the year 2026. That dead horse has already been beaten.

Re: OpenAI closes funding round at an $852B valuation

#303

Post by voganmother42 »

zmmmmm wrote: post #286
samdjstephens wrote: post #23

> The broad consumer reach of ChatGPT creates a powerful distribution channel into the workplace They mention this line in different forms a couple of times in the article. It’s clear they’re pretty rattled about Anthropic’s momentum in enterprise, I wonder how confident they really are in this rationale.

It's an interesting strategy, I see a pretty big risk from them leaning into it like this. We already have a vibe in my circles of the old "gmail vs yahoo" type thing where if you saw someone had a yahoo mail address you assumed they were technologically illiterate. Similarly it's mildly embarrassing already to say you used ChatGPT for something. It's not unrecoverable, but it's a pretty steep slippery slope they pro…

After the DoD moves? It is not just the technologically illiterate, it is part of the US culture war. OpenAI is the MAGA brand, like tesla.

Re: OpenAI closes funding round at an $852B valuation

#304

Post by komali2 »

aurareturn wrote: post #150
Barrin92 wrote: post #126

Earlier quoted context omitted.

not if your product is selling two dollars for one dollar and as soon as you'll start to charge more I'll switch to one of your twenty competitors profit isn't a function of having a killer product, it's a function of having no competition

And why do you think twenty competitors can stay competitive for years to come? Industries always consolidate and winners emerge. SOTA LLMs look like a natural monopoly or duopoly to me because the cost to train the next model keeps going up such that it won't make sense for 20 competitors to compete at the very high end. TSMC is a perfect example of this. Fab costs double every 4 years (Rock’s Law). It's almost impo…

The barrier to replicating TSMC isn't just cost, it's supply chain, geopolitics, and talent.

Only one company on Earth can make the UV lithography machines TSMC buys for their highest end fabs, and they're not selling to anyone else.

The PRC tried to brute force this supply chain backed by the full might of the Party's blank check, all red tape cut, literally the best possible duplication scenario, and they failed.

Re: OpenAI closes funding round at an $852B valuation

#305

Post by bandrami »

nl wrote: post #244
troupo wrote: post #107

Earlier quoted context omitted.

And that is revenue only. In the past 15 or so years most US companies (and especially startups) always talk about revenue only. Wheras only profit should matter. E.g. what good is 20 billion per year when "OpenAI is targeting roughly $600 billion in total compute spending through 2030". That is $150 billion per year?

What is the point - exactly - of profit? Profit is money you can't find a use for to grow your business, so you give some of it to the government in the form of tax. Also there is a big difference between operational expenses and capital expenses like building data centers. I think OpenAI is being very aggressive on the growth vs conservative financial management spectrum but just saying "only profit should matter" i…

> What is the point - exactly - of profit?

It's what attracts capital investment, which businesses need

Re: OpenAI closes funding round at an $852B valuation

#306

Post by burnt-resistor »

nine_k wrote: post #14
nemo1618 wrote: post #7

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 think this is reality-distortion field rivaling that of Jobs', and a crisis of faith. Nobody apparently believes that capital is worth investing into anything but AI.

That's the tao of hyper-financialization. It must keep growing irrational exuberance big and up forever like stonks or it bursts like DotCom and tulip mania. It's funny money that cannot be liquidated for real value for more than a tiny fraction of the imaginary trillions being thrown around. Similarly, Nvidia $4T mkt cap makes absolutely no sense when it has but a few incestuous customers-parters-investors throwing around tens of billions each per year devoid of fundamentals like essential service offerings that turn a profit. Those handful of whale customers will make their own chips or cease buying large qtys at any time.

Re: OpenAI closes funding round at an $852B valuation

#307

Post by komali2 »

Saline9515 wrote: post #283
komali2 wrote: post #280

Earlier quoted context omitted.

There's an accelerator here in Taiwan with a model I truly don't understand: 100k usd for 10%. 10%!! You've just valued the company at only 1 million! And taken a HUGE chunk of equity, not much left on the table! Maybe it makes sustainable sense but in the world of venture capital it seems the most profitable thing to do is lie through a Cheshire grin, every day.

This is very standard, Ycombinator, which hosts this board, does the same: https://www.ycombinator.com/about

Not exactly the same...

> YC invests $500,000 in every company on standard terms. Our $500K investment is made on 2 separate safes:

> We invest $125,000 on a post-money safe in return for 7% of your company (the "$125k safe")

> We invest $375,000 on an uncapped safe with a Most Favored Nation ("MFN") provision (the "MFN safe")

Re: OpenAI closes funding round at an $852B valuation

#308

Post by willis936 »

renewiltord wrote: post #296
hn_throwaway_99 wrote: post #235

Earlier quoted context omitted.

I've been involved in many startups, and this type of fundraising is not common, or at least it wasn't common before a few years or so ago The whole concept of talking about "runway" is basically calculating how much cash in the bank, that is actually in your bank account, will last. And this arrangement is different, as there are contingencies. In the past, VCs would just give you money in a particular series, and t…

Same. I know $100m+ range arrives in the bank account. Don’t know more than that. But for that sum, I know it routinely just arrives. Obviously this is 1000x as large so I make no claims to knowing that sum. But it’s routine for startup funding to arrive in bank account.

Both of CFS B rounds were cash, in recent years, and each in the range of "low billions". Sure another 2 orders of magnitude is another story, but so is selling hope. I'd say the latter is the thing that is unique here.

Re: OpenAI closes funding round at an $852B valuation

#309

Post by harmonic18374 »

komali2 wrote: post #307
Saline9515 wrote: post #283

Earlier quoted context omitted.

This is very standard, Ycombinator, which hosts this board, does the same: https://www.ycombinator.com/about

Not exactly the same... > YC invests $500,000 in every company on standard terms. Our $500K investment is made on 2 separate safes: > We invest $125,000 on a post-money safe in return for 7% of your company (the "$125k safe") > We invest $375,000 on an uncapped safe with a Most Favored Nation ("MFN") provision (the "MFN safe")

So YC values the company at $1.8 million. I don't think that's so different.
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