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OpenAI completes deal that values company at $157B

nytimes.com

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

#241

Post by rtsil »

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.

Netflix had all the paid TV channels worldwide, physical media sales and video-clubs as competitors. Uber had (still has) taxis. All of these were entrenched competitors with strong moats.

It's easy with hindsight to underestimate the forces of Netflix's competitors, but consider that even today, the revenue of Pay TV worldwide is still bigger that the revenue of streaming platforms. And unlike streaming platforms, Pay TV make profits hand over fist and didn't incur crazy debts to gain marketshare. They may be on the way to extinction, but they'll make tons of profits on their way out.

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

#242

Post by simplyluke »

s1artibartfast wrote: post #129
itsoktocry wrote: post #108

Earlier quoted context omitted.

> I don't see things ending well for OpenAI. I mean, what exactly do you see happening? The have a product people love and practically incalculable upside potential. They may or may not end up the winners, but I see no scenario in which it "doesn't end well". It's already "well", even if the company went defunct tomorrow. > that clause with that timeline seems a bit risky. I'm 99% certain that OpenAI drove the terms…

I seems like not ending well is the vast majority of outcomes. They dont have a profitable product or business today. It seems that me most likely outcome is that they have one replaceable product against many and few options to get return commensurate with valuation. My guess is that investors are are making a calculated bet. 90% chance the company become irrelevant, 10% chance it has a major breakthrough and someho…

> being shown super human intelligence behind closed doors

This seems to be the "crypto is about to replace fiat for buying day to day goods/services" statement of this hype cycle. I've been hearing it at least since gpt-2 that the secret next iteration will change everything. That was actually probably most true with 2 given how much of a step function improvement 3 + chatGPT were.

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

#243

Post by yunwal »

xvector wrote: post #179
yunwal wrote: post #141

Earlier quoted context omitted.

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

I stand corrected

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

#244

Post by s1artibartfast »

danielmarkbruce wrote: post #226
s1artibartfast wrote: post #148

Earlier quoted context omitted.

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.

There was an implication in there on risk. If you don't believe a company doing $4 bill of revenue is significantly less risky than the average VC investment, you might be in dreamworld.

My understanding is that it is 4B of losses, not revenue.

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

#245

Post by onlyrealcuzzo »

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

> The start-up expects about $3.7 billion in sales this year

Where do you get $400M and flatline?

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

#246

Post by tptacek »

paxys wrote: post #232
tptacek wrote: post #158

Earlier quoted context omitted.

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.

Google is a digital advertising company. OpenAI hasn't even entered the ads business. In the absolute best case they can take over a large chunk of Google's search market share, sure, but that still doesn't make it anything similar to Google in terms of finances. How do they start making the queries profitable? What do they do when their competitors (Claude, Gemini, Llama, Mistral, Grok and several others) undercut t…

This subthread is full of people explaining why they don't believe OpenAI could successfully match Google's financial performance. Sure. I'm not investing either. My point isn't that they're going to be successful, it's that there are plausible stories for their success that don't involve science fiction.

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

#247

Post by mulmen »

paxys wrote: post #232
tptacek wrote: post #158

Earlier quoted context omitted.

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.

Google is a digital advertising company. OpenAI hasn't even entered the ads business. In the absolute best case they can take over a large chunk of Google's search market share, sure, but that still doesn't make it anything similar to Google in terms of finances. How do they start making the queries profitable? What do they do when their competitors (Claude, Gemini, Llama, Mistral, Grok and several others) undercut t…

Google started as a useful search service then corrupted itself with ads. This is the same thing that Facebook and Reddit did. It’s not hard to imagine an LLM that provides “sponsored” responses.

So it’s a long term bet but the idea that Google would lose to an LLM isn’t far fetched to me.

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

#248

Post by chillfox »

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.

My bet would be on Anthropic or Meta winning the AI race.

Anthropic because their investment in tools for understanding/debugging AI.

Meta because free/open source.

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

#249

Post by plaidfuji »

paxys wrote: post #232
tptacek wrote: post #158

Earlier quoted context omitted.

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.

Google is a digital advertising company. OpenAI hasn't even entered the ads business. In the absolute best case they can take over a large chunk of Google's search market share, sure, but that still doesn't make it anything similar to Google in terms of finances. How do they start making the queries profitable? What do they do when their competitors (Claude, Gemini, Llama, Mistral, Grok and several others) undercut t…

Google didn’t start as an ads company. It started as a blank text box that gave you a bunch of good answers from the internet in a list of links.

Were there competitors that did the same thing? AltaVista? Yahoo? Did they undercut on cost? Google was free, I guess. But Google won because it maintained its quality, kept its interface clean and simple, and kept all the eyeballs as a result. Now Google is essentially the entry point to the internet, baked into every major browser except Edge.

Could ChatGPT become the “go-to” first stop on the internet? I think there’s a fair chance. The revenue will find its way to the eyeballs from there.

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

#250

Post by onlyrealcuzzo »

BonoboIO wrote: post #212
dom96 wrote: post #185

Earlier quoted context omitted.

or after building their own LLM that runs locally on Apple Sillicon they've decided that this technology is crazily overhyped

Apple survived with Siri for 10 years that is absolutely useless beside creating a timer … so they have time to wait and even use open source llms in the future.

It's almost as if people are willing to pay more for an iPhone than an assistant / LLM.
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