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

techcrunch.com

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

#611

Post by lenerdenator »

zozbot234 wrote: post #160
lenerdenator wrote: post #150

Earlier quoted context omitted.

> If this comes to pass OpenAI's value is near unlimited. How? If we have AGI, we have a scenario where human knowledge-based value creation as we know it is suddenly worthless. It's not a stretch to imagine that human labor-based value creation wouldn't be far behind. Altman himself has said that it would break capitalism. This isn't a value proposition for a business, it's an end of value proposition for society. T…

"End of human-based value creation" is tantamount to post-scarcity. It "breaks" capitalism because it supposedly obviates the resource allocation problem that the free-market economy is the answer to. It's what Karl Marx actually pointed to as his utopian "fully realized communism". Most people would think of that as a pipe dream, but if you actually think it's viable, why wouldn't you want it?

These people don't mean for you to live in post-scarcity. If they did, they'd just alleviate at least some of the scarcity we have now.

At least in the US, they're pretty big on not doing that. Like explicitly.

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

#612

Post by bentt »

ReptileMan wrote: post #352
bentt wrote: post #318

Someone please explain how OpenAI is not Netscape 2026. They had first mover advantage but no network effect, no moat, and are racing to stay ahead of infinitely resourced incumbents.

They are in bed with Microsoft not against them. And Nadela is not the sharpest knife in the drawer unlike Bill Gates.

In this scenario, Google is the incumbent. Microsoft is like… IBM circa 1996.

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

#613

Post by gigatexal »

dang wrote: post #221
gigatexal wrote: post #2

[flagged]

" Don't be curmudgeonly. Thoughtful criticism is fine, but please don't be rigidly or generically negative. " https://news.ycombinator.com/newsguidelines.html

It’s hard to not be jaded and suffer existential dread with what’s going on domestically and internationally dang.

I’ll try to put on a happy face and think of cogent arguments to make. My apologies.

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

#614

Post by dang »

gigatexal wrote: post #613
dang wrote: post #221

Earlier quoted context omitted.

" Don't be curmudgeonly. Thoughtful criticism is fine, but please don't be rigidly or generically negative. " https://news.ycombinator.com/newsguidelines.html

It’s hard to not be jaded and suffer existential dread with what’s going on domestically and internationally dang. I’ll try to put on a happy face and think of cogent arguments to make. My apologies.

I agree that it's hard.

No need to put on a happy face; there's plenty of room to stay within the site guidelines without forcing yourself all the way to false feeling.

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

#615

Post by robotresearcher »

beernet wrote: post #598
robotresearcher wrote: post #480

Earlier quoted context omitted.

> 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.

Google is the competitor I had in mind.

They aren’t going to run out of money. They have existing customer relationships. They invented the model architecture of which GPT is a variant. Their existing enormous business is their own AI customer.

OpenAI’s business seems way more precarious than Google. Users get the tech either way.

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

#616

Post by m3kw9 »

bentt wrote: post #572
m3kw9 wrote: post #505

Earlier quoted context omitted.

Ok where is the Microsoft explorer of this “Netscape”

Gemini is a pretty spot on comparison. Google is putting in front of users at every opportunity. And Gemini is a way better product than IE ever was.

thats possible, but so far they are underperforming with 3.0/3.1 pro models.

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

#617

Post by bandrami »

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.

I'd say that too if I were an AI CEO looking for funding

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

#618

Post by SR2Z »

fauigerzigerk wrote: post #564
chemmail wrote: post #535

Earlier quoted context omitted.

A little bit, but the scale is another magnitude higher. I just saw a chart yesterday that shows Uber burning $18B, Tesla burning $9B, and Netflix burning 11B before reaching profitability. Open AI so far spent $218 Billion.

The opportunity is disproportionately greater as well though. Unfortunately that doesn't change the fact even a small miscalculation could have an enormous impact. We are approaching levels of risk comparable in size to the subprime crisis of 2008.

Is it? AI isn't going to be a winner take all market. Competition between American AI labs and even Chinese ones have seen to that.

The winners for AI will be the product companies, because soon enough the top-tier models are all going to have good enough performance that companies can just pick the cheapest. It'll be a race to the bottom for inference and OpenAI is very poorly placed to compete in that kind of thing.

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

#620

Post by [deleted] »

dminik wrote: post #382
max51 wrote: post #250

Earlier quoted context omitted.

"I give you 30B$ worth of hardware that costs me <10B$ to make in exchange for 30B$ worth of shares in your company" would be a more accurate description.

How does this work with private companies? It feels like Nvidia could find that the market does not value OpenAI stock the same way they did.

[deleted]
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