OpenAI’s promise to stay in California helped clear the path for its IPO • Hacker News Board

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#321

Post by wubrr » Thu, Oct 30, 2025, 10:11 PM UTC

Jackpillar wrote: post #285

JumpCrisscross wrote: post #274

Earlier quoted context omitted.

> It's on you to prove the parent wrong and you provided nothing to explain why the Bay Area is special beyond history/staying power I’m literally saying it’s irrelevant due to incumbency effects. If someone is doing something AI outside the Bay Area, a decent business is to copy and outraise them.

Exactly. No one is arguing the historical & material reasons as to why Bay Area is the birthing place of many technological revolutions. The Bay Area is special because of said history/staying power - which has systemic downstream advantages that cannot be replicated. 60% of total VC funding is in the Bay Area alone. Being surrounded by Stanford, Berkeley, etc gives the region a constant flow of world class engineers…

> No one is arguing the historical & material reasons as to why Bay Area is the birthing place of many technological revolutions.

You're kinda missing the bigger picture - the fact that Bay Area was not always a tech hub, and became one at some point for various reason - which can happen in any other place (and has).

> which has systemic downstream advantages that cannot be replicated.

Seems like a very baseless and meaningless statement.

> Being surrounded by Stanford, Berkeley, etc gives the region a constant flow of world class engineers.

Except for the fact that the vast majority pf Bay Area tech talent does not come from Stanford or Berkeley, and is being outsourced at ever increasing rates.

> Theres just no other region like it and won't be for a very long time.

If you say so.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#322

Post by smcin » Thu, Oct 30, 2025, 10:44 PM UTC

starchild3001 wrote: post #228

astrange wrote: post #161

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Kelly_criterion https://en.wikipedia.org/wiki/Post-modern_portfolio_theory

I recently downloaded about 10 years of monthly price returns for QQQ, TQQQ, NVDA, GBTC, and a few others. Then I asked ChatGPT and Gemini (separately) to find the portfolio that maximizes an adjusted CAGR — roughly, mean return minus ½ × standard deviation². Result: 70% NVDA, 30% GBTC (Bitcoin), and 0% QQQ or TQQQ. Honestly, not a bad mix — especially for a small, high-risk slice of your portfolio. Next, I compared…

"the portfolio that maximizes an adjusted CAGR" over the ranges 2015-2025? Isn't that one just massively overfitting to the unique geopolitical events of 2016-current? 1970-2025 sounds better. But still that's baking in the USD exchange rate.

What happens if you backtest it by finding the equivalent portfolios for 1998-2008 (or even 1919-1929?)

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#323

Post by array_key_first » Thu, Oct 30, 2025, 11:31 PM UTC

bazmattaz wrote: post #257

array_key_first wrote: post #209

Earlier quoted context omitted.

I would not be convinced they outlive the criticism. I think it's highly likely in the next 10 years companies like Spotify and Uber will no longer exist. They're fundamentally antogonistic to their capital.

Spotify is a profitable business now though right? Sure it doesn’t make huge profits due to paying out about 70% to larks but it’s finally profitable

Yes, barely, and after cutting revenue per stream to 1/4th of what it was. Many artists make negative money on Spotify, because you have to pay them to put your music on there. And then if Spotify thinks bots are listening to your streams, you have to pay them more.

It's the same problem for Uber. Many Uber drivers make a negative wage. They don't know it, because nobody is going to tell them, but if you do the math, depending on your location, vehicle, and rates, you make a negative wage. Due to gas cost, tolls, maintenance, etc.

The problem here is that the uber drivers and artists are the only thing that makes the platform worth using. Spotify might think their capital is technology. That's because they're stupid. No, their capital is the library of music artists put on there.

If you continue to just antagonize and destroy your own capital that you're using to make money, your business will be blow up.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#324

Post by fragmede » Thu, Oct 30, 2025, 11:45 PM UTC

Hansenq wrote: post #239

terminalshort wrote: post #200

Earlier quoted context omitted.

I don't want to downplay the network effects here, but it's in CA entirely by coincidence. SV is in CA because William Shockley's family is there, which is why he founded Shockley Semiconductor there. It could have been somewhere else. The 2nd largest tech hub is in Seattle. It's there because that's were Bill Gates is from. Is SF the best place to start a startup if you want in office talent in 2025. 100% yes, but t…

Not entirely by coincidence. Yes Shockley was from CA, but as late as the 1980, two places were competing to be the center: Boston's Route 128 ("America's Technology Highway") or Silicon Valley. Silicon Valley won out because the CA constitution explicitly prohibits non-competes (which MA allows), leading to more rapid innovation. Very likely the infamous Traitorous Eight who left Shockley Semiconductor to found Fair…

Non-competes are one aspect, absolutely. However that's can't be the whole story because that applies to all of California and it's a decently sized state, with a lot of other areas. Any part of the southern California basin, San Diego, and Sacramento. If we include smaller areas (because silicon valley was once just apple orchards, that list gets longer.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#325

Post by fragmede » Thu, Oct 30, 2025, 11:58 PM UTC

close04 wrote: post #280

JumpCrisscross wrote: post #274

Earlier quoted context omitted.

> It's on you to prove the parent wrong and you provided nothing to explain why the Bay Area is special beyond history/staying power I’m literally saying it’s irrelevant due to incumbency effects. If someone is doing something AI outside the Bay Area, a decent business is to copy and outraise them.

> I think you’re wrong. But that’s irrelevant. The fact that it exists now is what gives it staying power. You said OP was wrong to say " that has nothing to do with the Bay Area and everything to do with accidents of history " but that it's irrelevant anyway because the area has incumbency effects. Those are 2 separate things, something that you claim to be wrong but irrelevant, and something you say is true. I agre…

Municipalities trying to make their own Silicon... Alley, Beach, Hills, Slopes, Forest, Prairie, Bayou, Desert, Roundabout, Docks, Glen, Fen, Cape, Oasis, (and more!) with varying degrees of success, so I don't know that it is unreasonably replicatible. Despite all those efforts, OpenAI and Anthropic both are heavy hitters in the AI industry, and they are both headquartered in San Francisco.

Naturally, nothing lasts forever. Not Silicon Valley, not the USA, not the Holy Roman Empire. Some things do last quite a while though. If we look all the way back to Hewett-Packard, though now a shadow of its former self, it was established in 1939.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#326

Post by fragmede » Fri, Oct 31, 2025, 12:04 AM UTC

seanhunter wrote: post #300

yellow_postit wrote: post #100

Earlier quoted context omitted.

The Texas Stock Exchange launches next year and I predict we will see a lot of tech try to move to launch there given txse claim to have lower compliance and less esg needs.

You know that Nasdaq isn't in Silicon Valley right? Lots of companies are based in the valley, listed in either CA or Delaware and go on to list in NYC now. There's no compelling reason for them to move to Texas. As for the compliance thing it remains to be seen, but generally companies in low-compliance jurisdictions trade at a "fraud discount" to compensate investors for the likelihood of untoward shenanigans that…

Stock exchange aside, being able to build buildings without getting held of years or even decades for an endangered tree frog, and also employees being able to afford housing are kind of important to companies. Texas has its downsides, for sure, but it would be silly to pretend there aren't other reasons for companies to move there that have nothing to do with the new stock exchange.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#327

Post by fragmede » Fri, Oct 31, 2025, 12:07 AM UTC

bchasknga wrote: post #203

shuckles wrote: post #127

Earlier quoted context omitted.

> That can change on a dime. People tried very hard to change it between 2020-2023 and utterly failed.

Cries in the number of "next Silicon Valley" in the last 30 years.

Silicon Alley, Beach, Hills, Slopes, Forest, Prairie, Bayou, Desert, Roundabout, Docks, Glen, Fen, Cape, Oasis... and that's not the complete list!

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#328

Post by fragmede » Fri, Oct 31, 2025, 12:11 AM UTC

uvaursi wrote: post #215

wubrr wrote: post #196

Earlier quoted context omitted.

> Exhibit A for Covid having not changed this is the continuing supremacy of Silicon Valley (tech) You mean like when China built chatgpt 4 in a weekend and open-sourced it for giggles? > Shenzhen (manufacturing) ..or you mean how US manufacturing 'clusters' almost completely disappeared/replaced by Chinese ones? > Proximity to investors. Proximity to customers. Proximity to a skilled employee pool. Proxomity to acqu…

> You mean like when China built chatgpt 4 in a weekend and open-sourced it for giggles? Link?

It's hyperbole, but they're referring to Deepseek-r1.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#329

Post by bix6 » Fri, Oct 31, 2025, 1:43 AM UTC

dragonwriter wrote: post #260

hodder wrote: post #66

Can someone explain to me why California would believe Sam Altman plans to stay in California? This is a weak handshake agreement that could easily be flipped post IPO. The very flip from non-profit to IPO shows he will do what it takes for OpenAI to "succeed", so why would the geographical location be any more permanent than corporate structure. This isnt a diss to Sam either, it just shows he is motivated by whatev…

> Can someone explain to me why California would believe Sam Altman plans to stay in California? This is a weak handshake agreement that could easily be flipped post IPO. It is not a “handshake agreement”, but binding written agreement with terms constraining the governance of the restructure OpenAI entities. https://oag.ca.gov/system/files/attachments/press-docs/Final Executed MOU Between OpenAI and California AG re…

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Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#330

Post by SR2Z » Fri, Oct 31, 2025, 3:17 AM UTC

wubrr wrote: post #311

SR2Z wrote: post #230

Earlier quoted context omitted.

> You mean like when China built chatgpt 4 in a weekend and open-sourced it for giggles? DeepSeek R1 is an amazing feat. It's not at the same level as other large frontier models from American companies, just close enough to make them sweat. > ..or you mean how US manufacturing 'clusters' almost completely disappeared/replaced by Chinese ones? The value of goods manufactured in the US has never been higher. US manufa…

> It's not at the same level as other large frontier models from American companies Cool story > The value of goods manufactured in the US has never been higher... Manufacturing has disappeared as a share of GDP, but that's not because we make less stuff. You're seriously going to try to argue how US manufacturing (which was the greatest share of global manufacturing by far) didn't decline, to support a point about h…

> Cool story

I am not going to link you benchmarks or revenue numbers. You can find those yourself, if you actually care about being right.

> It's funny that you don't see the contradiction. For the record, US manufacturing as a share of global manufacturing has significantly declined over the years. [0][1]

Yes, because China is _cheap_ and _dense_ and has a billion newly-minted middle-class members. Do you expect them to import everything from the US and just ignore the vast labor pool within a few metro stops of any given factory?

> to support a point about how China (Shenzhen) is apparently an unreplicable manufacturing hub due to 'cluster effect'?

The Pearl River Delta, which Shenzen is part of, has almost 90 million people and a world-class transit system. It's across the water from Hong Kong, a global financial center, and is bordered by factory-filled cities on the other side.

Yes, that makes it nearly impossible for other places to become Shenzen. Even within China it's special.

> If you need to be physically present for a meeting, you make a trip. There is absolutely zero benefit to living in close proximity to investors the rest of the time.

Right, because if you're doing business you can get by with a single investor meeting a year, right? There's no downside in time lost, money spent, ease of access, etc.? You think there's no benefit to, say, playing tennis on weekends with your buddy from college who now works at a VC?

> You're seriously going to try to argue how US manufacturing (which was the greatest share of global manufacturing by far) didn't decline

Why the hell does it matter what percentage of global manufacturing is done in the US? You cannot ask the average American (one of the wealthiest people in the world) to work in a sweatshop making T-shirts. You cannot ask the average American to work for minimum wage tightening screws in iPhones.

You can, as it turns out, ask them to work a robotic assembly line to build a car or weld on a jetliner - because you can pay them much more, and because there are enough of them in an area to run a factory. Aggregation benefits are even more important for manufacturing than they are for software.