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

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

#591

Post by nsvd2 »

ethbr1 wrote: post #286
bradfa wrote: post #237

Earlier quoted context omitted.

I give you $100 cash and you give me $100 worth of stock in return. Now you give me $100 cash to buy something from me that cost me $80 to produce. I end up with $100 worth of stock in your company which cost me only $80. No? NVIDIA gross margins lately are like 75%, so it's more like you give me $100 to buy something from me that cost me $25 to produce, hence I end up with $100 worth of stock in your company and it…

> hence I end up with $100 worth of stock in your company and it only cost me $25. You also lost out on $75 worth of cash revenue (opportunity cost from selling the same thing to a different customer), so really you just took stock in lieu of cash. It'd be different if Nvidia (TSMC) had excess production capacity, but afaik they're capped out. So it's really just whether they'd be selling them to OpenAI and getting e…

Sure, but OpenAI doesn't have cash. It does have stock.

Even if Nvidia has capped production for now, increased demand still allows them to sell chips at a greater margin. Or, to put another way, presumably Nvidia is charging OpenAI a premium for the privilege of paying with stock.

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

#592

Post by Muromec »

underlipton wrote: post #589
Muromec wrote: post #486

Earlier quoted context omitted.

I generally agree with the sentiment, but it's not the russian oligarch playbook. The playbook is some kind of a variation of buying out a productive asset in a legacy industry under it's market price (because everything is on fire already), then using political or monopoly power to funnel (tax) money through it and into your pockets (the asset has to function, but doesn't have to provide a good quality of service du…

Please read Sarah Kendzior. What's happening under Trump is different from what's happened under other admins precisely because he's drawing from the Russian quasi-state/mob playbook, and not from the normal "socially-caustic Capitalism" one. The difference is that one seeks to maintain a state, and one seeks to dismantle it and replace it with a quasi-state, which exists mainly to interface with other the entities t…

>replace it with a quasi-state, which exists mainly to interface with other the entities

I don't exactly disagree with that assessment and I think you should stay vigilant for that indeed. What I'm saying, that selling a hot potato to get cash is the opposite of what oligarchs are known to do. I could be that it's but a step to buy something else with oligarchic intentions in mind, but alternatively it could a normal westerner money-handling behavior.

>they are the company and state and the company is the service or product, so anyone interfacing with the product or service within the state is handing them their money.

That doesn't contradict what I wrote or at least meant. The asset in question is not the means of laundering, but a pretext for extracting money from everyone unfortunate enough to live in the forsaken place.

The laundering part usually comes when the oligarch wants to safeguard their own money from political risks, which they do by keeping the funds in a place that is outside of their (and their potential rivals) political influence. Otherwise, once the political balance shifts, the money is just gone, because no laws exist to guard it anymore. I'm not sure what this "outside" place could be for Americans, but could guess (with no confidence in the answer at all), it's either Swiss or Gulf banks. Maybe UK or whatnot. Some structures that have a combination of impartiality to their disputes, strong enough property and privacy regimes, but with zero to none ethical constrains to walk away from it.

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

#593

Post by sigmoid10 »

danielparsons wrote: post #407
sigmoid10 wrote: post #400

Earlier quoted context omitted.

GPT-4 came out 3 years ago and you can run comparable models for 1% of the cost nowadays. That is not 2x efficiency. That's two orders of magnitude in end-to-end compute efficiency.

you're looking at nearly the entire curve of the tech's development. that's like saying lightbulbs became 99% more energy efficient and therefore will become another 99% more energy efficient. but most techs follow an S curve.

>you're looking at nearly the entire curve of the tech's development

That's a pretty strong statement that would need some data or at least a mathematical argument to back it up. Otherwise it's like saying in the 1980s that PCs with 640kB RAM have reached their pinnacle in terms of what users can expect in real life benefits and there's no reason to keep pushing the tech.

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

#594

Post by RyanOD »

chrisandchris wrote: post #523
est31 wrote: post #488

Earlier quoted context omitted.

> But the problem is that Toys R Us is spending $15, 20, or maybe even $50 (who knows?) to sell a $10 toy. It's like how Uber and Airbnb in the early days were burning loads of cash to build market share. People went to these services because they were cheaper. Then they would increase prices once they had a comfortable position. OpenAI is also in a rapidly transforming field where there are a lot of cost reductions…

> It's like how Uber and Airbnb [...] I disagree. It's like Uber and Airbnb in how they try to gain market share. Big difference: For Uber (and when it got big, basically everybody I know has used it once in a while) and Airbnb, you oaid for each transaction. With OpenAI, most peopme are on the free tier. And if there is something incredibly hard, it's converting free users to paid users. That will, IMHO, be the thon…

I agree with this. For the casual user, I feel AI is only a "nice to have".

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

#595

Post by RyanOD »

underlipton wrote: post #418
SV_BubbleTime wrote: post #319

Earlier quoted context omitted.

OK, so absolutely good faith here what is the end game? Obviously, there’s a scenario of super power AI and then it’s a matter of continuing course. Electricity and silicon. What if you are right, and the scaling doesn’t work. It is too much power, time, hardware to improve… does openAI fold? Do they just actual use the models they have? Does everyone just decide that AI didn’t work and go back 5 years like it didn’t…

The people running these companies have a perverse incentive to keep the ball rolling as long as possible so that they can extricate as much personal wealth and influence as possible. Maybe AGI makes all the problems go away. But, failing that, they get out relatively scot-free when it all collapses. And they don't owe anything to the public. And no one is going to bring them up on fraud charges or any other kind of…

"so that they can extricate as much personal wealth and influence as possible"

I've always thought this. If you're running something like OpenAI, it really doesn't matter to you if the company fails because you're already comfortably wealthy. But, it sure would be nice to be worth another 10x billion - though I'm not totally sure why.

So these individuals perceive a large upside and no downside. It's more of a hobby than a job. Like learning to play piano. It would be amazing to be a badass pianist...but not a big deal if that never happens.

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

#596

Post by player1234 »

aurareturn wrote: post #557
bandrami wrote: post #465

Earlier quoted context omitted.

Your subscription fees didn't fully pay for the amortization on the chips you used for the inference.

Inference is profitable. Gross margins are in the 50%+ apparently. This is coming from Anthropic CEO.

[dead]

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

#598

Post by beernet »

robotresearcher wrote: post #480
beernet wrote: post #327

Earlier quoted context omitted.

How are ~1B active users not "moat"? Might have to pull out the "Haters gonna hate" like it's 2007

> How are ~1B active users not "moat"? When they cost more to serve than they bring in, customer switching cost is vanishingly low, your competitor has revenue from other things and you don't.

> When they cost more to serve than they bring in, customer switching cost is vanishingly low, your competitor has revenue from other things and you don't.

What? "Other things"? This is really vague. Who says competitors have lower CAC? It's rather likely competitors pay more for a new customer, due to, very simply, brand.

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

#599

Post by CamperBob2 »

echelon wrote: post #540
toraway wrote: post #462

Earlier quoted context omitted.

A classic hype merchant sales pitch: believe me, I was a doubter just like you, but I saw the light thanks to [insert latest model] ! (Which for anyone familiar with your long comment history as a regular HN poster, is comically absurd to imply. You've been reliably adamant that AI will demolish this or that entire industry overnight for years at this point).

> You've been reliably adamant that AI will demolish this or that entire industry overnight for years at this point We'll see who's right. I never said "overnight". Let's check in at the decade's end. Y'all dunked on me in 2019 when I said AI was coming for Hollywood. Have you seen Seedance 2.0? It's coming for us too. I've written five nines, active-active systems that handle billions of dollars of money movement da…

You're not wrong in principle, but you've made some specific extraordinary claims. If you're really that productive, generating useful work product at a rate of 20 kloc/day by yourself, people would pay just to learn how you're doing it!

Y'all dunked on me in 2019 when I said AI was coming for Hollywood. Have you seen Seedance 2.0?

Being right at the wrong time is often worse than just being outright wrong, I've found.

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

#600

Post by NekkoDroid »

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.

> Has OpenAI laid out the specific definition of what an AGI is for this case?

Yes and it's actually hilarious: a system that can perform most economically valuable work better than humans, or specifically when the AI generates $100 billion in profits.

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