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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

#51

Post by tux3 »

yumraj wrote: post #18
cs702 wrote: post #4

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'…

For “an” AI company, that can achieve market dominance, to achieve 1.57T market cap is not unrealistic. I think the question is, is OpenAI that company and is market dominance possible given all other players? I believe some investors are betting that it is OpenAI, while you and others are sceptic. Personally I agree with you, or rather hope that it is not, primarily as I don’t trust Sam Altman and wouldn’t want him…

OpenAI feels like the most politicaly active with its storylines, flashy backstabs, and other intrigue.

But as far as the technology, we're drowning in a flood of good AI models, which are all neck to neck in benchmarks. Claude might be slightly stronger for my use, but only by a hair. Gemini might be slightly behind, but it has a natural mass market platform with Android

I don't see how a single player sticks their neck out without being copied within a few months. There is — still — no moat.

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

#53

Post by Rebuff5007 »

I for one can never get over the fact that Mira Murati was not laughed out of the room when she said -- with a straight face -- that GPT4 had high school level intelligence and the non-existent GPT5 will have PHD-level intelligence [1].

IMO -- this is not a serious company with serious people building an important long-lived product. This is a group of snake oil salesmen that are in the middle of the greatest grift of their careers. That, and some AI researchers that are probably enjoying limitless gpus.

[1] https://www.timesnownews.com/technology-science/next-gen-cha...

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

#54

Post by danielmarkbruce »

cs702 wrote: post #4

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'…

This is a company at a $4 bill annual run rate.

In times gone by this would be a public company already. It's just an investment in a company with almost 2000 employees, revenue, products, brand etc. It's not an early stage VC investment, they aren't looking for a 10x.

The legal and compliance regime + depth of private capital + fear of reported vol in the US has made private investing the new public investing.

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

#55

Post by lumost »

heyitsguay wrote: post #25

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…

anecdotally, I'm flipping back and forth between o1 and GPT-4. o1 is mildly better at editing larger code segments. I worked with it to edit a large ~2k line python file in an unusual domain.

But o1 is also incredibly verbose. It'll respond with 1-2 pages of text which often contains redundant data. GPT-4o is better in it's descriptions.

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

#56

Post by moralestapia »

cs702 wrote: post #22
alex_young wrote: post #11

Earlier quoted context omitted.

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.

That's just not true. Source: a two-digit division.

Previous to this, they had about ~10B (via MS), and they've been operating for about 2 years at this scale. Unless they got this $$$ like a week away from being bankrupt, which I highly doubt.

Note: I'm not arguing they're profitable.

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

#57

Post by Workaccount2 »

mcast wrote: post #40
Workaccount2 wrote: post #21

Earlier quoted context omitted.

>You'll need it! If they can IPO, they will easily hit a $1.5T valuation. All Altman would have to do is follow what Elon did with Tesla. Lots of massive promises marinated in trending hype that tickles the hearts of dumb money. No need to deliver, just keep promising. He is already doing it.

The difference is Tesla had a moat with the electric car market, there were no affordable and practical EVs 10 years ago. OpenAI is surrounded by competition and Meta is constantly releasing Llama weights to break up any closed source monopolies.

Tesla is still overvalued today with a moat that is more a puddle than anything. Elon realized that cars weren't gonna carry the hype anymore, so now it's all robotaxi, which will almost certainly be more vaporware.

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

#58

Post by jddj »

throwup238 wrote: post #14

> The new fund-raising round, led by the investment firm Thrive Capital, values OpenAI at $157 billion, according to two people with knowledge of the deal. Microsoft, the chipmaker Nvidia, the tech conglomerate SoftBank, the United Arab Emirates investment firm MGX and others are also putting money into OpenAI. Yeah, that bodes well. Led by Jared Kushner's brother's VC firm with the UAE's sovereign wealth fund and So…

Microsoft and (indirectly) Nvidia are the real destinations for a bunch of that money anyway, so I think your point stands.

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

#59

Post by ralph84 »

throwup238 wrote: post #14

> The new fund-raising round, led by the investment firm Thrive Capital, values OpenAI at $157 billion, according to two people with knowledge of the deal. Microsoft, the chipmaker Nvidia, the tech conglomerate SoftBank, the United Arab Emirates investment firm MGX and others are also putting money into OpenAI. Yeah, that bodes well. Led by Jared Kushner's brother's VC firm with the UAE's sovereign wealth fund and So…

Microsoft and NVIDIA are guaranteed an ROI since it comes right back as revenue for them.

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

#60

Post by 0cf8612b2e1e »

baq wrote: post #34
jsheard wrote: post #29

Earlier quoted context omitted.

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?

Honestly, it isn't a bad plan at all. Assuming money even makes sense in a world with AGI, that is.

In the Star Trek/Culture/Commonwealth equally distributed, benevolent AI, sure. In the I’ve-got-mine reality, I assume only the select few can speak with the AI and use it to control the serfs.
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