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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

#371

Post by chronc6393 »

manquer wrote: post #253
SilverElfin wrote: post #202

Earlier quoted context omitted.

Does the GAAP accounting matter if everyone passively buys shares due to the new fast entry rules, which corruptly will force us all to buy into these companies? The fundamentals and true value seem less relevant than ever: https://www.benzinga.com/markets/tech/26/03/51248353/michael...

Diluting the index entry rules, only devalues the index utility. When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety. More likely than not, most of us are already holding stock in these companies one way or another. All the Mag 7 hold a major chunk of OAI and Anthropic stock anyway, slower entry does not make it le…

> When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety

Doubt it.

The world does not allow perfect competition.

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

#372

Post by troupo »

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's the point - exactly - of a company being sustainable?

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

#373

Post by chronc6393 »

troupo wrote: post #368
Swizec wrote: post #121

Earlier quoted context omitted.

> Wheras only profit should matter Profit is money you couldn’t figure out how to spend. During growth, you want positive operating margins with nominal profits. When the company/market matures, you want pure profits because shareholders like money. If you can find a way to invest those profits in new areas of growth, that’s better.

> Profit is money you couldn’t figure out how to spend. Profit is the money showing your business is sustainable. Ever since the ZIRP era US companies keep haemorrhaging money at a rate that is physically impossible to recoup. If OpenAI plans to lose 100+ billion dollars per year for half a decade, what profits are you talking about to offset the losses? > When the company/market matures, you want pure profits becaus…

> what profits are you talking about to offset the losses?

You don’t need profit to offset the losses.

You can simply reduce spending / expenses.

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

#374

Post by ifwinterco »

Aurornis wrote: post #184
apparent wrote: post #155

Earlier quoted context omitted.

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…

I think both things are true at once:

1) For a $100bn round, you won't get a single transfer of $100bn into your checking account, this is normal

2) Sam Altman is a liar and people (correctly) don't really believe him when he starts throwing numbers around

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

#376

Post by mhl47 »

bigwheels wrote: post #249
dabbz wrote: post #161

Earlier quoted context omitted.

It's a very frequently used structure by LLMs especially ones writing for LinkedIn.

"It's not X, it's Y." A linguistic presentation commonly referred to as constrastive negation .

Was looking for a precise term for that. Thank you!

Also AI-Linkedin-Bullshit likes to use "just" additionally and it's mostly along the lines of Y being something much more impactful then X.

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

#377

Post by walthamstow »

bigwheels wrote: post #249
dabbz wrote: post #161

Earlier quoted context omitted.

It's a very frequently used structure by LLMs especially ones writing for LinkedIn.

"It's not X, it's Y." A linguistic presentation commonly referred to as constrastive negation .

Humans may use commas here, but LLMs always use a full stop, always.

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

#378

Post by citizenpaul »

natas wrote: post #340
daemin wrote: post #336

What if all the people currently using these "AI" services are the entire market for those services? I'm pretty sure everyone that wants to use LLMs is already doing so and already paying for the service. That would mean the only way to increase growth would be to charge more per token and to get the existing people to use more tokens. Both of which seem to be only what mature companies do when trying to squeeze the…

Give it a year or two, and apple or any other hardware will have unified memory OR AMD will have a good offering to run all that stuff locally. It won't be as good as Claude, but it'll do for 90% of the things. It will be expensive as first, just like the first mainframes, then give it another 5 years or so, and it'll be affordable.

I'd argue this has already happened. The highest end mac pro is $10k and down from there. We might be returning to the appliance business model.

Its just a matter of Productizing the software to plug and play light office admin work.

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

#379

Post by gloryjulio »

SilverElfin wrote: post #202
manquer wrote: post #132

Earlier quoted context omitted.

They aren't reporting anything yet. What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation. Both will do public reporting only when they IPO[4] and have regulatory requirement to do so every quarter. For private companies[1] reporting to investors there are no fixed rules really[3] Even for public companies, there is fair amount of leeway on how G…

Does the GAAP accounting matter if everyone passively buys shares due to the new fast entry rules, which corruptly will force us all to buy into these companies? The fundamentals and true value seem less relevant than ever: https://www.benzinga.com/markets/tech/26/03/51248353/michael...

Yes gaap absolutely matters.

You can just choose not to play the accounting game, and only choose the ones that actually gaap viable as investment opportunities. For example mag7 - tesla are all relatively cheap when they dip.

Some times the best play is just not to play. If you think they are too risky, walk away. There are enough good oppotunities

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

#380

Post by swiftcoder »

simonebrunozzi wrote: post #57

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.

It's also like... >$50 billion in compute credits and discounted hardware between Amazon/Microsoft/NVidia. Which is all inside baseball since they simultaneously juice their financials with OpenAI's cloud compute bill
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