OpenAI completes deal that values company at $157B • Hacker News Board

Re: OpenAI completes deal that values company at $157B

#141

Post by yunwal » Wed, Oct 02, 2024, 9:53 PM UTC

xvector wrote: post #97

benterix wrote: post #64

Earlier quoted context omitted.

There are so many things wrong in this statement (starting with "immediately"). Let's assume they built a system they claim is AGI. Let's assume its energy consumption is smaller than that of a small country. Let's assume that we can verify it's AGI. Let's assume its intelligence is higher than average human. That's many "ifs" and I omitted quite a few. Now, the question is: would you trust it? As a human, a manager,…

If anyone in the thread has used o1 or the real-time voice tools, it's pretty clear AGI is here already, so we are really talking about ASI. You have no option but to trust an ASI as it is all-powerful by definition. If you don't trust ASI, your only option is to prevent it from existing to begin with. Edit: please note that AGI ≠ "human intelligence," just a general intelligence (that may exceed humans in some areas…

Let’s say you gave o1 an API to control a good robot. Could it throw a football? Could it accomplish even the most basic tasks? If not, it’s not generally intelligent.

Re: OpenAI completes deal that values company at $157B

#142

Post by changing1999 » Wed, Oct 02, 2024, 9:54 PM UTC

moralestapia wrote: post #71

diffeomorphism wrote: post #65

Earlier quoted context omitted.

GPT is a generic tool name. Those moats are pretty weak. People use Apple Idioticnaming or MS Copilot or Google whatever, which transparently use some interchangeable model in the background. Compared to chatgpt these might not be as smart, but have much easier access to OS level context. In other words: Good luck defending this moat against OS manufacturers with dominant market shares.

>Those moats are pretty weak. Name any other AI company with better brand awareness and that argument could make a little bit of sense. Armchair analysts have been saying that since ChatGPT came out. "Anyone could steal the market, anytime" and there's a trillion USD at play, yet no one has, why? Because that's a delusion.

What you are overlooking is the fact that AI today and especially AI in the future is going to be about integrations. Assisted document writing, image generation for creative work, etc etc. Very few people will look at the tiny gray text saying "Powered by ChatGPT" or "Powered by Claude"; name recognition is not as relevant as eg iPhone.

Anecdotally, I used to pay for ChatGPT. Now I run a nice local UI with Llama 3. They lost revenue from me.

Re: OpenAI completes deal that values company at $157B

#143

Post by s1artibartfast » Wed, Oct 02, 2024, 9:54 PM UTC

throwup238 wrote: post #73

hn_throwaway_99 wrote: post #46

Earlier quoted context omitted.

The funny thing about that statement is that if it actually does become true, all of those VCs (and Altman himself), whose job is ostensibly to find the optimal uses for capital, would immediately become obsolete. Heck, the whole idea that capitalism could just continue along in its current form if true AGI existed is pretty laughable.

The problems with central planning that capitalism ostensibly solves don't exist because of a lack of intelligence, but due to the impedance mismatch between the planner and the people. Making the central planner an AGI would just make it worse, because there's no guarantee that just because it's (super)intelligent it can empathize with its wards and optimize for their needs and desires.

It has been known since the 1920s that capitalism isn't perfectly efficient. The competition has always been between an imperfect market directed by distributed human compute vs a planner directed by politicians directed by human computed.

It is an argument about signal bandwidth, compression, and noise.

Re: OpenAI completes deal that values company at $157B

#144

Post by ToValueFunfetti » Wed, Oct 02, 2024, 9:56 PM UTC

deisteve wrote: post #44

$157B marketcap means they need to 20x their current revenue of roughly 400 million dollars by next year... But the revenue has flatlined and you can't raise your existing users cost by 20x... It truly is a mystery as to how anybody throwing other peoples money hopes to get it back from OpenAI

They made 300 million revenue last month, apparently up 17x from last year[1]. To get a P/E ratio of 20, assuming (falsely) that their spending holds constant, they'd need ~4x more revenue

[1]https://www.nbcnews.com/business/business-news/openai-closes...

Re: OpenAI completes deal that values company at $157B

#145

Post by layer8 » Wed, Oct 02, 2024, 9:56 PM UTC

mattmaroon wrote: post #80

cs702 wrote: post #4

Given the high risk, investors likely want a shot of earning at least a 10x return. $157 billion x 10 = $1.57 trillion, greater than META's current market capitalization. Greater returns would require even more aggressive assumptions. For example, a 30x return would require OpenAI to become the world's most valuable company by a large margin. All I can say to the investors, with the best of hopes, is: Good luck! You'…

If they accomplish AGI first, they will be the world’s most valuable company, by far. If they fall short of AGI there are still many ways a more limited but still quite useful AI might make them worth far more than Meta. I don’t know how to handicap the odds of them doing either of these at all, but they would seem to have the best chance at it of anyone right now.

If AGI is accomplished, there’s unlikely to be a “secret sauce” to it (or a patentable sauce), and accomplishing AGI won’t by itself constitute a moat.

Re: OpenAI completes deal that values company at $157B

#146

Post by seper8 » Wed, Oct 02, 2024, 9:58 PM UTC

TZubiri wrote: post #127

paxys wrote: post #100

$6.6B raise. The company loses $5B per year. So all this money literally gives them just an extra ~year and change of runway. I know the AI hype is sky high at the moment (hence the crazy valuation), but if they don't make the numbers make sense soon then I don't see things ending well for OpenAI. Another interesting part: > Under the terms of the new investment round, OpenAI has two years to transform into a for-pro…

Same thing was said of Netflix, of Uber, etc... Venture capital loses money to win marketshare, tale as old as time

Were Microsoft, Google, Amazon and Tesla/Twitter(x), and a whole bunch of other gigantic (Chinese aswell) corporations trying to compete for the same market back then?

I don't think Netflix and Uber had even a fraction of the competition that this field will have.

Re: OpenAI completes deal that values company at $157B

#147

Post by alanlammiman » Wed, Oct 02, 2024, 9:58 PM UTC

I wonder if these investors have a liquidation preference as they would in normal VC rounds. And if it's a 1x preference (as is normal) or if a higher multiple is built in.

Re: OpenAI completes deal that values company at $157B

#148

Post by s1artibartfast » Wed, Oct 02, 2024, 9:59 PM UTC

danielmarkbruce wrote: post #54

cs702 wrote: post #4

Given the high risk, investors likely want a shot of earning at least a 10x return. $157 billion x 10 = $1.57 trillion, greater than META's current market capitalization. Greater returns would require even more aggressive assumptions. For example, a 30x return would require OpenAI to become the world's most valuable company by a large margin. All I can say to the investors, with the best of hopes, is: Good luck! You'…

This is a company at a $4 bill annual run rate. In times gone by this would be a public company already. It's just an investment in a company with almost 2000 employees, revenue, products, brand etc. It's not an early stage VC investment, they aren't looking for a 10x. The legal and compliance regime + depth of private capital + fear of reported vol in the US has made private investing the new public investing.

Expected return is set by risk and upside, not offering size. What do you think the risk of ruin is here? I think there is a substantial chance that Open AI wont exist in 5 years.

Re: OpenAI completes deal that values company at $157B

#149

Post by seper8 » Wed, Oct 02, 2024, 9:59 PM UTC

threwaway4392 wrote: post #134

They haven't even started their own versions of AdWords. Google's money printing is based on people telling Google what they want in the search bar, and google placing ads about what they want right when they ask for it. Today people type what they want in the ChatGPT search bar.

Difference is is that I can just switch to another LLM.

I cant really do the same for Google.

Re: OpenAI completes deal that values company at $157B

#150

Post by nonameiguess » Wed, Oct 02, 2024, 9:59 PM UTC

brendoelfrendo wrote: post #95

throwup238 wrote: post #73

Earlier quoted context omitted.

The problems with central planning that capitalism ostensibly solves don't exist because of a lack of intelligence, but due to the impedance mismatch between the planner and the people. Making the central planner an AGI would just make it worse, because there's no guarantee that just because it's (super)intelligent it can empathize with its wards and optimize for their needs and desires.

I don't think the concern is that an AGI would become a central planner, but that an AGI would be so much better than human investors that the entire VC class would be outclassed, and that the free market would shift towards using AGI to make investment/capital allocation decisions. Which, of course, runs the risk of turning the whole system into a paperclip optimizing machine that consumes the planet in pursuit of p…

A fair amount of evidence has existed for at least 50 years that a chimpanzee throwing darts at a wall can outperform most active fund managers, yet this has done nothing to reduce their compensation or power.