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OpenAI raises $110B on $730B pre-money valuation

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Re: OpenAI raises $110B on $730B pre-money valuation

#241

Post by skydhash »

ChadNauseam wrote: post #220
_fat_santa wrote: post #95

IMO this looks largely like another circular investment. Amazon's investment is tied to OpenAI using AWS for their Frontier product and I assume Nvidia's conditions are that OpenAI continue buying hardware from them. Then there's SoftBank though given that those are the same guys that invested heavily in WeWork, I assume this is just very brash bullishness on their part. From my perspective, I hope that OpenAI surviv…

> On the one hand you can look at these companies investing and take it as a signal that there is something there (in OpenAI) that's worth investing in. On the other hand all these companies that are investing are basically getting that investment back through spending commitments and such and are just using OpenAI as a proxy for what is essentially buying more revenue for themselves. I don't understand how this is s…

I'm not a finance expert, but it may be because investment and purchase are are taxed differently (I don't know). You gave $100 away as investments, got $100 back as revenue. Meanwhile you establish that your product are worth $100 (while costing $80) and you have $100 worth of shares. Without considering side effects, you gave away $80 worth of product for $100 (supposed) worth of shares. But shares are subject to side effects and those side effects can be quite nice (making the news, establishing price,...).

The issue is that there's no organic force behind those changes and it makes everything hollow. You could create a market inside a deserted area and make it appear like a metropolis.

Re: OpenAI raises $110B on $730B pre-money valuation

#242

Post by max51 »

_fat_santa wrote: post #95

IMO this looks largely like another circular investment. Amazon's investment is tied to OpenAI using AWS for their Frontier product and I assume Nvidia's conditions are that OpenAI continue buying hardware from them. Then there's SoftBank though given that those are the same guys that invested heavily in WeWork, I assume this is just very brash bullishness on their part. From my perspective, I hope that OpenAI surviv…

The "circular investment" is mostly start up companies using their stocks instead of cash to pay for server hardware and cloud computing. There is a few extra steps in between that make things look weird and convoluted, but the end results is really just big companies giving hardware and getting shares of ai companies in exchange for it.

Re: OpenAI raises $110B on $730B pre-money valuation

#244

Post by amarcheschi »

qoez wrote: post #135
lm28469 wrote: post #105

Earlier quoted context omitted.

https://www.axios.com/2026/02/27/altman-openai-anthropic-pen... > Sam Altman says OpenAI shares Anthropic's red lines in Pentagon fight 90% chance it's all PR but who knows

Never believe anything sam says

Never believe anything says

Re: OpenAI raises $110B on $730B pre-money valuation

#245

Post by Sleaker »

bradfa wrote: post #237
ChadNauseam wrote: post #220

Earlier quoted context omitted.

> On the one hand you can look at these companies investing and take it as a signal that there is something there (in OpenAI) that's worth investing in. On the other hand all these companies that are investing are basically getting that investment back through spending commitments and such and are just using OpenAI as a proxy for what is essentially buying more revenue for themselves. I don't understand how this is s…

I give you $100 cash and you give me $100 worth of stock in return. Now you give me $100 cash to buy something from me that cost me $80 to produce. I end up with $100 worth of stock in your company which cost me only $80. No? NVIDIA gross margins lately are like 75%, so it's more like you give me $100 to buy something from me that cost me $25 to produce, hence I end up with $100 worth of stock in your company and it…

Aaaannd get to claim the 100 as revenue to show investors that the company is performing better than if I had not made the deal, which also means that demand for the product stays inflated which also means I can keep my margins higher by not needing to discount my product.

Re: OpenAI raises $110B on $730B pre-money valuation

#246

Post by aerhardt »

whoami4041 wrote: post #157

That's a pretty lofty valuation for a company that has yet to demonstrate code generation anywhere near Anthropic's models if they're leaning into the engineering angle.

"Calvinism makes pretty lofty claims for a religion who has yet to demonstrate soul salvation anywhere near Lutheranism if they're leaning into the reformation angle"

- Someone in the 16th century, probably

Re: OpenAI raises $110B on $730B pre-money valuation

#247

Post by Dumblydorr »

advael wrote: post #124
randusername wrote: post #108

There's this saying that if you owe the bank a million dollars, you have a big problem, but if you owe the bank 100 million dollars, the bank has a big problem. Is the same thing true for corporations? At some point the numbers are so wild the entire economy must help you succeed? I don't mean "too big to fail" exactly, more like "so big eventual success is guaranteed at all costs"

Those are the same thing. The whole point of saying "too big to fail" is to evoke the moment in the housing crash where governments largely threw most of their citizens under the bus by bailing out banks rather than homeowners for the banks' wildly irresponsible decisions. "Too big to fail" means the government steps in and bails you out, and that phrase became popular because for many it was the final nail in the co…

Would the current administration bail out OpenAI?

Re: OpenAI raises $110B on $730B pre-money valuation

#248

Post by ruben81ad »

whoami4041 wrote: post #157

That's a pretty lofty valuation for a company that has yet to demonstrate code generation anywhere near Anthropic's models if they're leaning into the engineering angle.

I dont see much of a difference betwen Claude,Codex and GLM with OpenCode. Any on them, nowadaws, works really, really, well.

Re: OpenAI raises $110B on $730B pre-money valuation

#249

Post by ben_w »

bradfa wrote: post #237
ChadNauseam wrote: post #220

Earlier quoted context omitted.

> On the one hand you can look at these companies investing and take it as a signal that there is something there (in OpenAI) that's worth investing in. On the other hand all these companies that are investing are basically getting that investment back through spending commitments and such and are just using OpenAI as a proxy for what is essentially buying more revenue for themselves. I don't understand how this is s…

I give you $100 cash and you give me $100 worth of stock in return. Now you give me $100 cash to buy something from me that cost me $80 to produce. I end up with $100 worth of stock in your company which cost me only $80. No? NVIDIA gross margins lately are like 75%, so it's more like you give me $100 to buy something from me that cost me $25 to produce, hence I end up with $100 worth of stock in your company and it…

> I give you $100 cash and you give me $100 worth of stock in return. Now you give me $100 cash to buy something from me that cost me $80 to produce. I end up with $100 worth of stock in your company which cost me only $80. No?

Sure, but how's that a cheat code? If you normally sell something for $100 that costs $80 to make, and then use that $100 revenue to buy $100 of stock, this is an identical outcome for you.

Re: OpenAI raises $110B on $730B pre-money valuation

#250

Post by max51 »

AnimalMuppet wrote: post #61
Yizahi wrote: post #43

Nvidia will get all that money back via GPU purchases, Amazon via cloud rental and SoftBank is being typical SoftBank - a rich but not particularly bright kid in a class :) .

"I give you $30 billion if you use it to buy $30 billion of stuff from me" doesn't sound like a very good investment. Is Nvidia expecting more back than it puts in? Enough more to make the deal profitable? Or is it just to keep Nvidia from crashing?

"I give you 30B$ worth of hardware that costs me <10B$ to make in exchange for 30B$ worth of shares in your company" would be a more accurate description.
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