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

techcrunch.com

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

#301

Post by rvnx »

loeber wrote: post #284
_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…

Comparing OpenAI and WeWork is a nonsensical perspective. OpenAI is shipping the most revolutionary product in a generation, with 800 million monthly active users. It's the fastest revenue ramp ever, at incredible scale -- $20B+ ARR. These are real fundamentals. They matter. And the cost of inference is coming down all the time. WeWork was a short-term/long-term lease arbitrage business. The two are nothing alike.

They had a first-mover advantage for sure.

It used to be revolutionary, but now there is a huge difference: plenty of competition, and a growing number of high-quality models that can run offline (for free!) or cheaper (Gemini-Flash for example).

They are in some way the Nokia of AI, "we have the distribution, product will sell", but this is not enough if innovation is weak.

They are even lagging behind (GPT-5 is a weaker coder than Claude, Sora is a toy compared to Seedance 2.0, etc).

One Apple releases the AIPhone, running offline models, with 32 GB of unified memory, with optional cloud requests, then it's going to be super though for OpenAI.

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

#302

Post by hogwasher »

famouswaffles wrote: post #228
giancarlostoro wrote: post #149

Earlier quoted context omitted.

Here's one, basically AI is driving 15% of Google's profits at the end of 2025. https://advergroup.com/gemini-hits-650-million-users/ I didn't really realize how big Gemini was until I saw that Qualia was using it, they apparently used 0.01% of Geminis total tokens (100 billion) in about 3 months, they're in production with the title and escrow industry, so that's a great deal of data going through Gemini, unlike som…

> Here's one, basically AI is driving 15% of Google's profits at the end of 2025. https://advergroup.com/gemini-hits-650-million-users/ This does not at all tell us Gemini is profitable or driving 15% of its profits. The article does not mention profits even once. It then goes on to bizarrely compare Gemini's monthly active users to Open AI's weekly active ones.

Indeed, that article doesn't support a single part of that claim.

It kinda feels like an LLM-generated article that another LLM picked as a "citation", and then no human bothered to check if it actually said what the LLM said it did.

And, really, advergroup.com? Who sites an advertising agency as if it's a reliable resource?

https://advergroup.com/digital-marketing/

"AdverGroup Web Design and Creative Media Solutions is a full service advertising agency that delivers digital marketing services. We manage Google Ad Word campaigns and/or Meta Ad Campaigns for local clients in Chicago, Las Vegas and their surrounding suburbs."

So credible a resource on Gemini's performance/profitability... /sarc

But yeah it doesn't even actually say anything about profits, let alone attribute any specific percentage of profits to Gemini. It just vague marketing copy.

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

#303

Post by engineer_22 »

loeber wrote: post #284
_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…

Comparing OpenAI and WeWork is a nonsensical perspective. OpenAI is shipping the most revolutionary product in a generation, with 800 million monthly active users. It's the fastest revenue ramp ever, at incredible scale -- $20B+ ARR. These are real fundamentals. They matter. And the cost of inference is coming down all the time. WeWork was a short-term/long-term lease arbitrage business. The two are nothing alike.

Will they maintain an edge over other AI companies long term? With so many market participants will it become a race to the bottom?

This valuation puts their P/E around 40.

Anthropic $380B valuation on $13B ARR. P/E around 30.

5 years ago Uber was in similar territory. Tesla... Well we won't mention Tesla.

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

#304

Post by CSMastermind »

eikenberry wrote: post #260
pier25 wrote: post #72

> Amazon will start with an initial $15 billion investment, followed by another $35 billion in the coming months when certain conditions are met. Those conditions are an IPO or reaching AGI [1]. Nvidia and SofBank will pay in installments. Also very interesting that Microsoft decided to not invest in this round. A PR statement was made though [2]. [1] https://americanbazaaronline.com/2026/02/26/amazon-to-invest... [2…

Has OpenAI laid out the specific definition of what an AGI is for this case? The one from their mission is quite vague and the general community has nothing close to a universal common definition... which means they will most likely just define it as what they already have when the timing is right.

At least in their Microsoft contract it means $100 billion in profit, though they don't need to have actually made that money, they just need to show they're on track to do so.

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

#306

Post by reducesuffering »

clouedoc wrote: post #24
mikkupikku wrote: post #13

SoftBank? The music must be stopping soon, hold onto your butts.

What's the meme with SoftBank? Just that they're super bad at investments?

Ya. The WeWork debacle and investing $300 million into Wag, an imploded Uber for dog walking, surely wasn't helping.

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

#307

Post by copx »

paxys wrote: post #184
pier25 wrote: post #72

> Amazon will start with an initial $15 billion investment, followed by another $35 billion in the coming months when certain conditions are met. Those conditions are an IPO or reaching AGI [1]. Nvidia and SofBank will pay in installments. Also very interesting that Microsoft decided to not invest in this round. A PR statement was made though [2]. [1] https://americanbazaaronline.com/2026/02/26/amazon-to-invest... [2…

Very convenient to put "AGI" in all these agreements because the term is fundamentally undefinable. So throw out whatever numbers you want and fight about it and backtrack later.

The definition used to be "passes the Turing test" .. until LLMs passed it.

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

#308

Post by nradov »

nelsonic wrote: post #253
bandrami wrote: post #233

Earlier quoted context omitted.

It's not "continue" buying as much as this is NVIDIA fronting the money for (most of) the hardware OpenAI has already ordered from them. It's like borrowing rent money from your drug dealer.

Great analogy. ;-) Doubt Jensen sees himself as a “dealer” but considering the vendor lock-in and margins, he pretty much is the Tony Montana of Ai Chips. It’s nuts that this type of financing is legal.

I don't see the problem as long as materially significant transactions by publicly traded companies are properly disclosed to investors. If someone loses money by buying NVDA then they have only themselves to blame.

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

#309

Post by rvnx »

131hn wrote: post #262
muddi900 wrote: post #172

Earlier quoted context omitted.

Actually it is the other way around; every upstart claims that their invention is the mostest revolutionariest thing ever. 99.9% of them are not. The nay sayers are right most of the time. Recent high-profile examples include Segway, NFT, Crypto as a whole, pre-tranformers voice assistants and various "Design Thinking" projects like those Amazon prime buttons.

My grandma (and my parents, by the way) have never heard of Segway, NFTs, or crypto, but they use ChatGPT all the time.

They would use Claude or Grok for day-to-day if they had heard of it.

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

#310

Post by danny_codes »

aurareturn wrote: post #266
himata4113 wrote: post #243

Less than a decade ago companies reaching 1 trillion was still every much "out there". Now we have an IPO at almost 1 trillion. It's clear that the stock market cannot be considered normal anymore, held up on hopes at prayers at best.

Sure it can. The value of the dollar coincides with stock market valuations.

Exactly. A devalued dollar means higher number without adjustment
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