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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

#351

Post by ywvcbk »

trhway wrote: post #335
ants_everywhere wrote: post #293

Earlier quoted context omitted.

But don't they need a moat? They're running against not only every major tech company with access to training data and also all the open source models. The models will have diminishing returns and other players seem better suited to providing value added features.

you don't need a moat during the gold rush. You need scale - largest number of biggest shovels with which the stuff to be shoveled the fastest. There is so much money right now to be sucked up from the world. We're talking valuations in AI at $100M+ per employee. https://finance.yahoo.com/news/uae-backs-sam-altman-idea-095... >The models will have diminishing returns Wasn't that the going thinking before ChatGPT? And…

> the stuff to be shoveled

They are spending a lot on shovels but it’s not clear that there is that much “stuff” (consumer demand) to be shoveled.

VC money can only take you so far, you still need to have an actual way of making money.

LLMs might effectively replace Google but they are already a commodity. It’s really not clear what moat OpenAI can build when there are already a bunch of proprietary/open models that are more or less on the same level.

That basically means that they can’t charge much above datacenter cost + small premium longterm and won’t be able achieve margins that are high enough to justify current valuation.

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

#352

Post by Ekaros »

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…

Also Google's adds are not just in their products. They are absolutely everywhere step down from other big players. And I don't think OpenAI can beat that moat. It is entirely different game, and very hard to enter or someone else would have done it.

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

#354

Post by ywvcbk »

Shakahs wrote: post #258
plaidfuji wrote: post #249

Earlier quoted context omitted.

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…

Well when you describe it that way, OpenAI also started as a blank text box that gave you a bunch of good answers, and they've already expanded with other services. I already use ChatGPT as my first go-to stop for certain search queries.

I guess the difference (at least at comparable development stages) is that a single user query cost almost nothing for Google compared to how much money running ChatGPT costs.

I wouldn’t be surprised if OpenAI were still losing money even with the same CPM that Google search has.

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

#356

Post by cubefox »

changing1999 wrote: post #133
cubefox wrote: post #10

Earlier quoted context omitted.

It's the company that's most likely to be the first to develop superintelligence.

We heard for years that Uber was the company that's most likely to be the first to develop self-driving cars. Until they weren't. You can't just trust what the CEOs are hyping.

I think Waymo was always ahead in terms of self-driving, and still is today.

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

#357

Post by KoolKat23 »

sub7 wrote: post #323

Funny that they will call syntactically correct word vectors trained on reddit comments "AGI". There is no "self learning", just chaining outputs trained on different .txt instruction sets. There has never been a better time to have human intelligence and apply it to fields that are moving towards making critical decisions based on latent space probability maps. NLP and Human-Computer Interaction however are fields t…

Think you need to read up what transformers actually do (they refine syntactically, semantically and whatever additional way you wish) and what emergent properties they have.

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

#359

Post by benterix »

xvector wrote: post #97
benterix wrote: post #64

Earlier quoted context omitted.

There are so many things wrong in this statement (starting with "immediately"). Let's assume they built a system they claim is AGI. Let's assume its energy consumption is smaller than that of a small country. Let's assume that we can verify it's AGI. Let's assume its intelligence is higher than average human. That's many "ifs" and I omitted quite a few. Now, the question is: would you trust it? As a human, a manager,…

If anyone in the thread has used o1 or the real-time voice tools, it's pretty clear AGI is here already, so we are really talking about ASI. You have no option but to trust an ASI as it is all-powerful by definition. If you don't trust ASI, your only option is to prevent it from existing to begin with. Edit: please note that AGI ≠ "human intelligence," just a general intelligence (that may exceed humans in some areas…

> If you don't trust ASI, your only option is to prevent it from existing to begin with.

I don't understand this sentence. I don't trust Generative AI because it often spits out false, inaccurate or made up answers, but I don't believe my "only option is to prevent it from existing".

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

#360

Post by ywvcbk »

iepathos wrote: post #272
paxys wrote: post #232

Earlier quoted context omitted.

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…

Ads are the most likely monetization path for openai. They want to capture as many users right now and can pull the trigger on ads whenever they want to start juicing users further. As long as the funding flows they can delay the ads. Google and Facebook were ad free initially for years only switching to it for monetization after building up critical user mass.

To cost per user for Google and FB was/is almost insignificant(relative to LLMs). So all the ad revenue was almost free cash.

It’s not even clear if OpenAI is breaking even with the $20 subscription just on GPU/compute costs alone (the newer models seem to be a lot faster so maybe they are). So incrementally growing their revenue might be very painful if they keep making the UX worse with extra ads while still simultaneously losing money on every user.

Presumably the idea is that costs will go down as HW became faster and models themselves more optimized/efficient. But LLMs themselves already seem to almost be a commodity so it might become tricky for OpenAI to compete with a bunch of random services using open models that are offering the same thing (while spending a fraction on R&D)

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