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Does OpenAI have a moat?
Edit: You can downvote me all you want, I have plenty of karma to spare. This is OpenAI's strongest moat, whether people like it or not.
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Maybe they view it as at least a sure thing for a 2x return... Another issue here is that at this value level they are now required to become a public company and a direct competitor to their largest partners. It will be interesting to see how the competitive landscape changes.
My understanding is that the company is burning $0.5+ to $1+ billion each month. I'd say that's very high risk.
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As a layman outsider, it doesn't seem like it. Anthropic is doing great work (I personally prefer Claude) and now there are so many quality LLMs coming out that I don't know if OpenAI is particularly special anymore. They had a lead at first, but it feels like many others are catching up. I could be _very_ wrong though.
They recently released a new model, called "o1-preview", that is significantly ahead of the competition in terms of mathematical reasoning.
Also, if "significantly ahead" just means "a few months ahead" that does not justify the valuation.
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
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'…
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'…
It's fine, Sam's bulletproof plan is to build AGI (how hard could it be) and then ask the AGI how they can make a return on their investments. https://www.threads.net/@nixcraft/post/C5vj0naNlEq If they haven't built AGI yet that just means you should give them more billions so they can build the AGI. You wouldn't want your earlier investments to go to waste, right?
If I were an investor, I'd be pretty concerned with such a high valuation after the o1 release. It's great, no question, but in my usage so far it's a modest step up from 4o, much smaller than the 3->4 jump. Real world exponential growth is exponential until it's logistic, and this sort of feels like entering that phase of the LLM paradigm. Talking to friends who are very successful, knowledgeable AI researchers in i…
They do not actually need any further technology development to continue to add profitable products. There are numerous ways they can apply their existing models to offer services with various levels of specificity and target markets. Even better, their API offerings can be leveraged by an effectively infinite variety of other types of business, so they don't even need to do the application development themselves and can still profit from those companies using their API.
Does OpenAI have a moat?
Earlier quoted context omitted.
As a layman outsider, it doesn't seem like it. Anthropic is doing great work (I personally prefer Claude) and now there are so many quality LLMs coming out that I don't know if OpenAI is particularly special anymore. They had a lead at first, but it feels like many others are catching up. I could be _very_ wrong though.
They recently released a new model, called "o1-preview", that is significantly ahead of the competition in terms of mathematical reasoning.