OpenAI is in deep trouble is what I am reading into this
Why?
OpenAI leans toward waiting until next year for IPO
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Re: OpenAI leans toward waiting until next year for IPO
#112AI exits in America probably have a political cliff approaching fast as populist backlash will hit them, or perhaps they see political winds favorable to regulatory capture in the future and are waiting for that?
Data centers are the next Dark Fiber from 2000. After VCs and private Equity fund them there will not be sufficient demand because AI will inevitably not entirely live up to all the hype. The fire sale will eventually begin. Then Google, M$, Apple and Amazon will buy them at a discount just like Google snatched up the dark fiber after 2000.
Re: OpenAI leans toward waiting until next year for IPO
#113With all the uncertainty about AI regulation, I don't think now is the time.
How do you even value a company when we don't even know if GPT-6 will be made available to the general public?
Re: OpenAI leans toward waiting until next year for IPO
#114With all the uncertainty about AI regulation, I don't think now is the time. How do you even value a company when we don't even know if GPT-6 will be made available to the general public?
I’m not so sure the uncertainty around _regulation_ is the concern here.
Re: OpenAI leans toward waiting until next year for IPO
#115Earlier quoted context omitted.
OpenAI did confidentially file their S-1, which costs a ton of money to put together for the bankers and regulators to review. They did test the market and it looks like either the banks or people directly around Altman told him not to move forward. That doesn't mean Zitron was wrong about OpenAI IPOing. They took steps in that direction and then decided not to move forward. That's not his fault. As far as the bubble…
FWIW I think there's a "Y2K never happened" future here, where the bubble never bursts (in the sense of some insane market valuation proving to be lunatic) but everyone does what they can to make sure it doesn't burst on them , and they pull back and the bubble just deflates. Take for example the action on SPACs that made the "SPAC everything" era end.
Not popping doesn't seem possible to me, since all investment has been directed towards it, massive construction projects have been started, etc... The revenue needed to keep OpenAI and Anthropic afloat is insane and there's no way businesses are going to start paying the real price when there's no ROI compared to human expertise.
AGI is fundamentally impossible through data scaling like they tried to claim and achieving AGI is what all this depends on. The long tail problem will remain undefeated and the IPOs are a desperate move to get the cash needed to scale one last time.
They could have just kept improving the technology without all the psychosis and finding use cases and ways to make it more reliable but instead they bet everything on a language model becoming their slave god.
Slowly deflating would be nice, but I don't see how. In any case the economy is getting wrecked and any goodwill tech companies had with employees is gone after going completely adversarial towards them as soon as they had an opportunity to. The most profitable use case of gen-AI is still spams and scams.
Re: OpenAI leans toward waiting until next year for IPO
#116[flagged]
> It’s a small compensation for the immense damage you’ve all done to the industry and more importantly the economy
For all of those on HN that think venture capital is just numbers in a spreadsheet, consider that every dollar spent on AI is one that was not spent investing in the ”normal” economy. If this gamble does not play out, there will be bills to pay for all of society. As stated in Chernobyl: ”Every lie we tell incurs debt to the truth”, except in this case ”the truth” is the (un-)employment status of your friends, relatives and neighbors.
Re: OpenAI leans toward waiting until next year for IPO
#117The window has basically closed for them for the time being. The business math just isn’t there. The best option at this point is kick the can down the road and hope market sentiment improves next year. Not much signal that it will, and quite a lot of signal the sentiment only declines, but pumping the brakes is the least worst option on the table.
> The business math just isn’t there.
What do you mean? I promise I'm not being facetious or satirical. I'm just too simple and conservative of an investor to understand this comment. (for example: Is the price-to-earnings ratio too high? I probably wouldn't want to invest in the business.)
Re: OpenAI leans toward waiting until next year for IPO
#118Earlier quoted context omitted.
> window has basically closed for them for the time being. The business math just isn’t there Unless Anthropic also cancels its IPO, this probably isn't it.
The math doesn’t help Anthropic either but the market views these two companies very differently at the moment. Anthropic is seen as having momentum. Open AI is seen as having likely peaked. That makes a huge difference when pitching an IPO.
> Anthropic is seen as having momentum.
How can you tell that? "The Market" at the moment is the private investor market and, to my (admittedly untrained) eye, those two companies are being treated exactly the same when they raise.
Re: OpenAI leans toward waiting until next year for IPO
#119Earlier quoted context omitted.
The math doesn’t help Anthropic either but the market views these two companies very differently at the moment. Anthropic is seen as having momentum. Open AI is seen as having likely peaked. That makes a huge difference when pitching an IPO.
Agree but Anthropic momentum is fading too. Open source is starting to slowly become a source of frustration for frontier labs In the discussion around value for money.
> Open source is starting to slowly become a source of frustration for frontier labs In the discussion around value for money.
Ironic, considering that they got their ball rolling by taking from Open Source with neither credit nor attribution.