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OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

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Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#131

Post by lelanthran »

nl wrote: post #61
mandevil wrote: post #48

Earlier quoted context omitted.

I know that people keep saying "we're early on here", but I take it as a negative signal that people keep thinking we are in the early innings here. Compared to previous generations of technology change, a great deal of time has passed, it should be a bit disconcerting that no one seems to have found a way to make money out of this yet. Look at previous killer apps- they came out quickly and were raking in money very…

I think that fact that IPOs have grown slower over the years is more about larger VC markets where they can fund valuations up to hundreds of billions rather than something to do with adoption. As you note, Netscape and Amazon IPOed fairly quickly. Google took 6 years (1998 to 2004) Facebook took 8 years (2004 to 2012) Alibaba Group took 15 years (1999 to 2014) Claude Code is at $30B annual recurring revenue, and it…

> Claude Code is at $30B annual recurring revenue, and it launched in Feb 2025, and OpenAI at $25B (although they measure partner revenue differently). By comparison the iPhone make $630M revenue in the 12 months after it was launched.

What does revenue have to do with it? Companies usually want to IPO with a decent profit margin showing on the books, revenue doesn't usually come into it.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#132

Post by shalmanese »

utopiah wrote: post #103
asim wrote: post #83

Nothing is worth $852B in that space of time unless they are printing more than half of that in cash which to be clear they are not. They are burning it at that rate. Let's be clear. It's a valuable company, a valuable product, a valuable technology. It set the trend for the next phase of computer usage. But it's not worth $852B in that span of time and when it goes public that reality will bear down on them quickly.…

> justified in another 10 years. Hard to imagine when they don't have any moat. Sure they have ... I don't know how many users but it's not like a social network. Instagram was valued $10B with 10 very VERY fast not because of it's tech or employees but mostly IMHO because of the number of locked in users ... because of OTHER users. Here if one wants to move from OpenAI to Anthropic, they can and they do. You might h…

> Even basic email has more lock-in than any of the model provider.

History has proven the average person has very little ability to discern which products have lock-in.

Everyone was confidently predicting Uber would dominate over all the regional ride sharing apps because ride sharing is a commodity and subsidies were enough to shift user behavior.

The thesis from AI providers about lockin have always been coherent: increased personalization and learning of workflows over time would increasingly make using a new AI much worse than an AI that already knows you. If you look at the human virtual assistant world, stickiness is incredibly high once are happy with your onboarded assistant because onboarding a new person unavoidably sucks.

Is this thesis correct? We don’t know, it took Uber billions of burnt cash to discover their thesis was incorrect.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#133

Post by jasomill »

TheDong wrote: post #38
gradus_ad wrote: post #8

Claude Code is extremely easy to set up and use. I suspect its saturation among software professionals is at the majority of the addressable market. What if there are no other killer apps for Enterprise? Only CC will produce the level of token churn that could drive huge profits for model providers. The Enterprise market is not as substantial as the rapid success of CC makes seem.

What about "cowork", aiming to be the claude code of excel files and pdfs and screenshotting your desktop to tell you what's wrong? Like, that feels like it's also a huge amount of token churn ("sure, I can search every xls file on your machine to find the 2023 invoice from that company"), and very early in its adaption curve. Most people are still using AI as a webpage chatbot to ask questions to and copy+paste betw…

An AI that consumes every document on the system in response to a simple search request is going to be fired just as quickly as a human who does the same thing not long after replacements able to use conventional search tools to efficiently accomplish the same task are widely available.

Similarly, customers who rely on AI cowork tools will come to favor systems and applications that expose AI-friendly interfaces, which shouldn't be difficult to implement in most cases under the assumption that the models in question are already good at consuming API documentation and writing code (and, for that matter, writing API documentation, refactoring, and generating relatively straightforward wrapper code).

I have less faith in the market's ability to effectively respond to security threats in a timely fashion, alas.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#134

Post by prescriptivist »

mandevil wrote: post #124
prescriptivist wrote: post #119

Earlier quoted context omitted.

On top of that, the APIs/Tools/Function Calls into the real world don't exist yet. But consumer products are going to start eventually exposing functionality to these LLMs. By that time, I wonder if we'll all have an edge-inference box sitting in every one of our houses that we buy from a consumer products company like Apple or from Amazon, or directly from OpenAI or Anthropic. These little brains will be the low lat…

Previous generations of technological change of the calibre we are told AI will be also required major changes to the real world and new products to be built: new cell towers had to be constructed, fibre cables laid, data centers built, personal computers produced, warehouses established. And software needed to be fundamentally rewritten to support each of these generations too. And yet the companies doing that in th…

> And yet the companies doing that in those previous generations managed to produce huge profits significantly faster than Generative AI has.

Have you considered a simple answer to this inconsistency? The market and investors does not demand that these AI companies make a profit. The only reason companies are expected to make profits is because either those who own shares in the company expect it, or those willing to invest in a company expect it.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#135

Post by kamaal »

the__alchemist wrote: post #11
fraywing wrote: post #2

What happens if OpenAI collapses at this point? Is it just too big to fail given defense contracts and Microsoft? The Sora sunsetting marked a big shift towards enterprise focus and meeting Anthropic on the enterprise battlefield, but almost all engineers I work with or know are using Claude at this point exclusively. Anyone seeing differently?

> Anyone seeing differently? There have been a stream of HN posts (I'm noticed this mainly in the past few weeks) implying some people prefer ChatGPT/Codex to Claude. Anecdotally, Claude on the $20/month plan can only run 1-3 queries per 4 hours before rate limiting, often stopping in the middle of a query. ChatGPT/Codex doesn't have this problem.

>>Anecdotally, Claude on the $20/month plan can only run 1-3 queries per 4 hours before rate limiting, often stopping in the middle of a query.

The free version is pretty much unusable. Not a single query completes, You get only one query every 4 hours, given like 12 waking hours, you get 3 queries, none of which complete.

$20 plan gets you only a small distance from there.

Looks like the focus is entirely on Enterprise customers these days. They don't even bother with their regular users these days. CC is entirely a enterprise product.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#136

Post by sbierwagen »

altmanaltman wrote: post #123
sbierwagen wrote: post #88

Earlier quoted context omitted.

The point of AI is that it's supposed to be intelligent. Why silo it in an app? Instead of telling it what to automate, shouldn't it sit at the OS level, watch everything you do, and figure out what to automate by itself?

> shouldn't it sit at the OS level, watch everything you do, and figure out what to automate by itself? Read that again and really ask yourself if you want a private company to have access to all that and the ability to do whatever it wants with your system at the OS level.

On a smartphone, you're trusting Apple or Google to make the OS. They already can do anything they want with your system. Do you read every line of code in every security update?

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#137

Post by matchagaucho »

lelanthran wrote: post #130
matchagaucho wrote: post #110

Earlier quoted context omitted.

"previous killer apps" - exactly. That's the point. Everyone is anchored in AI as being the next desktop app. It's not. We're only using 1% of what these models will ultimately do when they're running 24/7 as utilities serving new economic models. There just isn't enough compute right now to realize the larger monetization strategies.

> There just isn't enough compute right now to realize the larger monetization strategies. How can this be relevant? Why isn't the compute we have available right now sufficient for turning a profit? Is this another one of those "We lose money on each sale but make it up in volume" things? I mean, if much much larger investments are needed before current LLM providers can turn a profit, that's not a good indicator th…

Profit is not the goal in large transformational tech cycles.

See Bezos' playbook for Amazon. They weren't profitable for years.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#138

Post by matchagaucho »

prescriptivist wrote: post #119
matchagaucho wrote: post #110

Earlier quoted context omitted.

"previous killer apps" - exactly. That's the point. Everyone is anchored in AI as being the next desktop app. It's not. We're only using 1% of what these models will ultimately do when they're running 24/7 as utilities serving new economic models. There just isn't enough compute right now to realize the larger monetization strategies.

On top of that, the APIs/Tools/Function Calls into the real world don't exist yet. But consumer products are going to start eventually exposing functionality to these LLMs. By that time, I wonder if we'll all have an edge-inference box sitting in every one of our houses that we buy from a consumer products company like Apple or from Amazon, or directly from OpenAI or Anthropic. These little brains will be the low lat…

More likely people will delegate their agents to run in the cloud.

Edge AI on iPhone, however... many potential applications around vision, hearing, interpreting your surroundings in real-time.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#139

Post by tim333 »

torginus wrote: post #128
gradus_ad wrote: post #8

Claude Code is extremely easy to set up and use. I suspect its saturation among software professionals is at the majority of the addressable market. What if there are no other killer apps for Enterprise? Only CC will produce the level of token churn that could drive huge profits for model providers. The Enterprise market is not as substantial as the rapid success of CC makes seem.

What is incredibly disgusting for me, is the idea that there can be only one winner in the stock market, which spits in he face of free market competition. This is not an AI thing, this is a stocks thing, which Ive been complaining about incessantly. If a given domain, like AI, has competition, that means you have to sell things at cost + margin, and rush ahead or be crushed by competitors. Will definitely make you g…

I don't think it's true there can only be one winner. Lots of industries have multiple successful large companies.

Re: OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports

#140

Post by thefounder »

impulser_ wrote: post #41
thefounder wrote: post #33

Earlier quoted context omitted.

what makes gpt 5.4 bad to chat ? To me it seems smart and does the job albeit it’s a bit slow. I’m using it only/mostly with the “pro” /xhigh reasoning

The way it converses is the least human like out of all models. It communicates like its writing markdown documents instead of just conversing normally like every other model does. You ask a question and it spits out a design doc instead of just answering the question like a normal human would.

But why would you want it to converse like a human? What I need is concise information not a buddy to talk to. If anything I see it as a feature
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