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Confidential submission of draft S-1 to the SEC

openai.com

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Re: Confidential submission of draft S-1 to the SEC

#221

Post by siren2026 »

JumpCrisscross wrote: post #218
siren2026 wrote: post #216

Earlier quoted context omitted.

> But for NASDAQ 100 I'm going to go ahead and say this was a brilliant market move, since nobody ever talked about that index before this. Most people know the NASDAQ100 as its ticker QQQ. Also known as the high risk - high reward investment. After reading how Nasdaq changed the rules in order to court all the mega IPOs to list with them, I will never ever consider a Nasdaq fund again. The rule change about the avai…

> After reading how Nasdaq changed the rules in order to court all the mega IPOs to list with them, I will never ever consider a Nasdaq fund again We have zero evidence for that chain of causation. And we have zero evidence of significant outflows for NASDAQ 100 since this rule change. (There is early evidence of inflows , but I suspect that's just because nobody talked about the NASDAQ 100 before and this turned out…

I agree with you that this might be a good marketing move overall.

And I don't really care about the chain of causation. The change of rules for the available float and the fact those funds will buy based on the market cap and not the float makes it a completely irresponsible investment at this point.

Re: Confidential submission of draft S-1 to the SEC

#222

Post by JumpCrisscross »

wyager wrote: post #220
toufka wrote: post #196

How much did Apple (via Google (via xAI (via SpaceX))) just crush their product? Seems an awful lot like Apple will commoditize the models that power Siri, and just “sherlocked” a trillion dollar private company.

Apple has completely dropped the ball on every single detail of AI rollout for the last 5 years - why do you think they will suddenly stop now? My prior is that the new siri stuff is just as vaporware as the previous "apple intelligence" rollout

> Apple has completely dropped the ball

Apple has sat out a capital-allocation shitshow. Its investors and likely customers are better off for their patience.

Re: Confidential submission of draft S-1 to the SEC

#223

Post by JumpCrisscross »

siren2026 wrote: post #219
JumpCrisscross wrote: post #209

Earlier quoted context omitted.

> point he makes is that companies go public when they think they can get the maximum our of their shares on the retail market I think this is what's going on right now. But there are a variety of reasons that can drive IPO timing. Need for cash and owners needing liquidity being chief among them. I'd also say that post-Covid, retail has become a commanding section of the American equity markets in a way I don't thin…

Both OpenAI and Anthropic were able to raise astronomical amount of cash on the private markets just weeks ago. I don't think that's what's driving them. I really think what is driving this is the need for insiders, employees, early investors to be able to sell their stock at scale before the music stops. And You can only do that through a full IPO. All those companies had private secondary transaction but none of th…

> what is driving this is the need for insiders, employees, early investors to be able to sell their stock at scale before the music stops

How would you differentiate insiders needing to sell versus insiders needing to dump before a crash?

I remember when Uber and Airbnb and WeWork went public in quick succession. There were similar claims. WeWork never made it public. And Uber and Airbnb's IPO investors made of fantastically.

Re: Confidential submission of draft S-1 to the SEC

#224

Post by lumost »

JumpCrisscross wrote: post #123
PunchyHamster wrote: post #115

Earlier quoted context omitted.

> That genuinely looks like SpaceX having cornered some valuable compute. That's nice way to say "invested in AI that turned out to be flop nobody wants to pay for so they are selling spare capacity"

> That's nice way to say "invested in AI that turned out to be flop nobody wants to pay for so they are selling spare capacity" Both takes are true. xAI invested in capacity that was supposed to yield frontier-model-maker margins. Grok failed to generate enough interest. So now they're selling it. That's absolutely a good business, in a way that's more certain than the frontier-model one. But it's also lower margin,…

Why do we think frontier model vendors are high margin?

Re: Confidential submission of draft S-1 to the SEC

#225

Post by magarnicle »

hypendev wrote: post #208
gekoxyz wrote: post #176

Earlier quoted context omitted.

While I agree on the smell I think that the situations are really different. I am not an economist but I think that other than the situation of the huge amount of money in play we are in a really different case. The general user (and I have noticed it especially with today's WWDC) basically doesn't get any benefit from AI (neither LLMs, image generation or photo editing). They were promised living like in Wall-e in 5…

I wouldn't argue the same. My parents love using ChatGPT, asking it all kinds of questions. My mom discovered Claude and helps her immensely with her job - where she would have to take it home and work a few hours to be able to finish the tasks on her computer, as her company that still uses Office 98, now Claude does it in 5 minutes. They fixed so many random issues using it, it is insane. My dad had a bike issue wh…

Office 98

Re: Confidential submission of draft S-1 to the SEC

#226

Post by JumpCrisscross »

siren2026 wrote: post #221
JumpCrisscross wrote: post #218

Earlier quoted context omitted.

> After reading how Nasdaq changed the rules in order to court all the mega IPOs to list with them, I will never ever consider a Nasdaq fund again We have zero evidence for that chain of causation. And we have zero evidence of significant outflows for NASDAQ 100 since this rule change. (There is early evidence of inflows , but I suspect that's just because nobody talked about the NASDAQ 100 before and this turned out…

I agree with you that this might be a good marketing move overall. And I don't really care about the chain of causation. The change of rules for the available float and the fact those funds will buy based on the market cap and not the float makes it a completely irresponsible investment at this point.

> fact those funds will buy based on the market cap and not the float makes it a completely irresponsible investment at this point

It's an index. The conventional way to market weight is to use market cap. The float rules are mostly for technical reasons around transaction costs for very large indices. There is a theoretical argument for float weighting, inasmuch as if you bought the stock market you'd be buying the float, not all of all of the companies. But I haven't seen research to say one way is definitively better than the other.

I agree they should have probably paired the float-rule change with a gradual onramp. But again, NASDAQ 100 isn't big enough to really need to care about this. (Half a trillion is obviously a lot of money. But not relative to the equity markets, and not when spread across a hundred of the largest names.)

Re: Confidential submission of draft S-1 to the SEC

#227

Post by bleepblap »

JumpCrisscross wrote: post #215
bleepblap wrote: post #151

Earlier quoted context omitted.

What I don't understand is how it's even a good low-margin business. Maybe I'm missing something but: Data centers (before recently) are low margin businesses because all the inputs are commodities: you buy power (joules), power (PDU), cooling hardware, physical racks, etc.. from the same vendors as everyone else. Worse, your biggest potential clients have the scale to just build it on their own and cut you out becau…

> because all the inputs are commodities AI compute hardware is not a commodity. And in a shortage, commodities can command high margins. xAI has lots of NVIDIA GPUs and HBM. It also has permits and power hook-ups, both things that are getting harder to come by day by day in the U.S. Natural gas is a commodity. Doesn't make having lots of right now bad business. > the whole game is hoping that they hope to charge mor…

> AI compute hardware is not a commodity. And in a shortage, commodities can command high margins.

I don't see the distinction you're drawing about "commodity", but I'm happy to be wrong on that. My point was that spaceX's ai division is buying all their inputs from external vendors and can't meaningfully differentiate themselves from person Y who buys all the same hardware except for the fact they bought them first. Which...

> Correct. But charging people now generates incumbency advantages

I don't see now this is an "incumbency advantage". There's nothing that sticks their clients to stay there and sign up for the next data center.

Re: Confidential submission of draft S-1 to the SEC

#228

Post by zerobees »

shermantanktop wrote: post #89
jordemort wrote: post #70

I have instructed my financial advisor to keep my exposure to the upcoming wave of AI IPOs as close to zero as possible.

So...all cash?

Given that the US govt is reportedly talking to OpenAI about taking a stake, your only choice might be Zimbabwean dollars.

Re: Confidential submission of draft S-1 to the SEC

#229

Post by gekoxyz »

hypendev wrote: post #208
gekoxyz wrote: post #176

Earlier quoted context omitted.

While I agree on the smell I think that the situations are really different. I am not an economist but I think that other than the situation of the huge amount of money in play we are in a really different case. The general user (and I have noticed it especially with today's WWDC) basically doesn't get any benefit from AI (neither LLMs, image generation or photo editing). They were promised living like in Wall-e in 5…

I wouldn't argue the same. My parents love using ChatGPT, asking it all kinds of questions. My mom discovered Claude and helps her immensely with her job - where she would have to take it home and work a few hours to be able to finish the tasks on her computer, as her company that still uses Office 98, now Claude does it in 5 minutes. They fixed so many random issues using it, it is insane. My dad had a bike issue wh…

Maybe I downplayed it too much but I really think this is still "in distribution" (we always have to remember that we are tech savy people and we influence the people that surround us). I see the value, but in my opinion it's not a generational opportunity, but a great acceleration. We are treating it like generational opportunity. That's why I say "everyone know there will be a crash, but noone knows how big that will be". The AI industry is not (in my opinion obviously) worth $ 391B [1] of added value.

[1] https://www.grandviewresearch.com/industry-analysis/artifici...

Re: Confidential submission of draft S-1 to the SEC

#230

Post by siren2026 »

JumpCrisscross wrote: post #223
siren2026 wrote: post #219

Earlier quoted context omitted.

Both OpenAI and Anthropic were able to raise astronomical amount of cash on the private markets just weeks ago. I don't think that's what's driving them. I really think what is driving this is the need for insiders, employees, early investors to be able to sell their stock at scale before the music stops. And You can only do that through a full IPO. All those companies had private secondary transaction but none of th…

> what is driving this is the need for insiders, employees, early investors to be able to sell their stock at scale before the music stops How would you differentiate insiders needing to sell versus insiders needing to dump before a crash? I remember when Uber and Airbnb and WeWork went public in quick succession. There were similar claims. WeWork never made it public. And Uber and Airbnb's IPO investors made of fant…

> How would you differentiate insiders needing to sell versus insiders needing to dump before a crash?

To answer this, just ask yourself how many of the insiders would have bought the stock at current IPO's price? Most insiders would probably never touch those stocks at this price. I know a couple people at OpenAI and Anthropic that are very clearly selling everything they can as soon as they can.

This is all a carefully orchestrated PR game that is relying on retail to be the ultimate fool. I guess to some level every IPO is like that (A PR game to hype the company).

But never before had we 3 mega IPOs happening at almost the exact same time with so much money to unload on retails with dubious ways to force funds to gobble them.

Most IPOs end up negative after the first few quarters (at least compared to the SP500). When we are talking about a 20B$ company it matters less than 5T$ being suddenly fully unloaded on the public.

> And Uber and Airbnb's IPO investors made of fantastically.

Did they? https://www.alphaspread.com/comparison/nasdaq/abnb/vs/indx/g...

The only way they might have is by getting the shares at the actual IPO price, and even then it's around the same as the SP500 return since then.

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