Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

OpenAI completes deal that values company at $157B

nytimes.com

Post reply on HN
Print view View original

171–180 of 443 posts

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

#171

Post by azinman2 »

tptacek wrote: post #158
nwiswell wrote: post #106

Earlier quoted context omitted.

> if they don't make the numbers make sense soon then I don't see things ending well for OpenAI. This is pretty much obvious just from the valuations. The wild bull case where they invent a revolutionary superintelligence would clearly value them in the trillions, so the fact that they're presently valued an order of magnitude less implies that it is viewed as an unlikely scenario (and reasonably so, in my opinion).

You don't need science fiction to find the bull case for OpenAI. You just have to think it stands to be the "next" Google, which feels increasingly plausible. Google's current market capitalization is in the trillions.

In 2023 Google had $307.39B in revenue and $24B in profit last quarter (suggesting ~100B in profit this year). Meanwhile OpenAI is losing money and making no where near these sums.

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

#172

Post by azinman2 »

hintymad wrote: post #170
azinman2 wrote: post #161

Earlier quoted context omitted.

Given their scale and direct investments from Microsoft, what makes you think this is any cheaper? They’ll be getting stuff at or near cost from azure, and Azure already exists and with huge scale to amortize all of the investments across more than just OpenAI, including volume discounts (and preference) from nvidia.

I assumed that Microsoft gave them discount and credits as investment, but the cost by itself is like any other big customer can get.

Of course the cost isn’t near zero, but is the pricing “at Microsoft’s cost”? If it is, then them building a datacenter wouldn’t save anything, plus would have enormous expenses related to, well, building, maintaining, and continuously upgrading data centers.

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

#173

Post by jesseab »

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'…

Investors probably aren't expecting a 10x return on a late stage investment like this.

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

#174

Post by choilive »

smt88 wrote: post #91
lumost wrote: post #42

Earlier quoted context omitted.

That is also much lower than Uber at its peak.

Uber was a literally life-changing product with an obvious value for anyone. LLMs have neither benefit.

Every cafe, airport, school I've been to has people using ChatGPT or its competitors. Its obviously valuable for almost anyone. Just like how people cant imagine life before smartphones, people wont be able to imagine life before LLMs became ubiquitous. Its everywhere.

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

#175

Post by ynabil »

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…

OpenAI finances is a bit tricky since most of their expenses are the cloud costs while their biggest investor/shareholder Microsoft invested in them with mostly Azure credit so although their finances seem unsustainable, I think the investors are banking in if the things went bad Microsoft will buy them out and make even small ROI like what they did with Inflection.

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

#176

Post by KoolKat23 »

Rebuff5007 wrote: post #53

I for one can never get over the fact that Mira Murati was not laughed out of the room when she said -- with a straight face -- that GPT4 had high school level intelligence and the non-existent GPT5 will have PHD-level intelligence [1]. IMO -- this is not a serious company with serious people building an important long-lived product. This is a group of snake oil salesmen that are in the middle of the greatest grift o…

I currently can ask gpt4 to do a high school intelligence level task for me (financial data capture) so the issue?

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

#177

Post by gm3dmo »

hintymad wrote: post #154
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…

Most of the loss comes from hefty cost of inference, right? OAI runs on Azure, so everything is expensive at their scale: the data, the compute, and GPU instances, and storage, and etc. I'd venture to guess that they will start building their own data centers with their own inference infra to cut the cost by potentially 75% -- i.e., the gross markup of a public cloud service. Given their cost structure, building thei…

Building datacenters will take a significant amount of time. if they don’t have locations secured then even more so.

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

#178

Post by austhrow743 »

philipkglass wrote: post #135
0cf8612b2e1e wrote: post #60

Earlier quoted context omitted.

In the Star Trek/Culture/Commonwealth equally distributed, benevolent AI, sure. In the I’ve-got-mine reality, I assume only the select few can speak with the AI and use it to control the serfs.

There's no future where OpenAI makes everyone else a "serf" though. In 1948 certain Americans imagined that the US could rule the Earth because it got the atomic bomb first, and they naively imagined that other countries would take a generation to catch up. In reality the USSR had its own atomic bomb by 1949. That's what the competition with OpenAI looks like to me. There are at least three other American companies w…

America not using its nuclear advantage to secure its nuclear advantage doesn’t mean it couldn’t have.

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

#179

Post by xvector »

yunwal wrote: post #141
xvector wrote: post #97

Earlier quoted context omitted.

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.

> Let’s say you gave o1 an API to control a good robot. Could it throw a football?

Maybe.

> Could it accomplish even the most basic tasks?

Definitely: https://youtu.be/Sq1QZB5baNw

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

#180

Post by wslh »

seper8 wrote: post #146
TZubiri wrote: post #127

Earlier quoted context omitted.

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.

I think the simplified question is if OpenAI is a natural monopoly like Google was/is or if that market has a different structure like an oligopoly (e.g. mobile phone market), "perfect" market, etc. On the technological side it seems obvious (does it?) that we can run good models ourselves or in the cloud. What is less clear if there will be a few brands that will offer you a great UX/UI, and the last mile wins.
Post reply on HN