[HN Gopher] OpenAI Nearly Doubles Valuation to $157B in Funding ...
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OpenAI Nearly Doubles Valuation to $157B in Funding Round
Author : bookofjoe
Score : 23 points
Date : 2024-10-02 17:12 UTC (5 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| bookofjoe wrote:
| https://www.wsj.com/tech/ai/openai-nearly-doubles-valuation-...
| olivermuty wrote:
| It is very fascinating to see a kind of modern day version of the
| tulip craze play out in real time. What kind of revenue must
| OpenAI stabilize at to defend such a valuation? It's not like
| they have any first mover advantage or other kinds of moats vs
| Anthropic & co.
| hu3 wrote:
| Agreed.
|
| OpenAI is currently the best in some major criterias, but not
| all. Gemini has much larger context window, for example.
|
| And behemoths like Google/Meta/Apple can remain irrational with
| their AI spending longer than OpenAI can remain solvent. Unless
| Microsoft steps in, which they already did, kind of.
| user90131313 wrote:
| Even their core team is no longer there. So investors are not
| the smartest for pushing it that high.
| TrackerFF wrote:
| Eh, the tech is legit. But I guess the problem is to figure out
| how to make money in the long term. I can't really think of any
| similar products where something costs ridiculous amounts of
| money to develop, and then the product has a effective shelf-
| life of what...6-12 months? Before every other competitor has
| caught up.
|
| I guess the big problem with AI/ML of the LLM type is that the
| data and compute is the gold, or fuel if you will. How does one
| commercialize a product in the long term, when each iteration
| becomes magnitudes more expensive than the previous, and the
| previous products become almost worthless within 12 months.
|
| Oh yeah, keep growing your number of subscribers. But that also
| has a natural limit.
|
| Maybe at some point, these AI models will be so integrated and
| omnipresent in everyone's daily like that some kind of
| oligopoly or monopoly arises, and they can leverage that.
| n_ary wrote:
| Probably they have more things in store than they offer
| publicly?
| FloorEgg wrote:
| $10bn annual profit within a couple years.
|
| Doesn't seem too outrageous
| paxys wrote:
| Says who? They are currently estimated to _lose_ $5B annually
| on $3.7B revenue.
| RIMR wrote:
| Imagine for a moment that you are following the hype
| instead of the facts. Now you understand why investors dump
| their money on these kinds of things.
| glial wrote:
| Despite this, there hasn't been much movement in MSFT recently,
| despite Microsoft owning a big chunk of OpenAI.
| blackeyeblitzar wrote:
| One thing that still surprises me is how quickly Satya and
| Microsoft have washed their hands clean of the OpenAI fiasco.
| They're insiders. They must have known who Sam is, what was
| happening to the team, etc. Satya used his position to make a
| threat that he would destroy OpenAI, and in the process left Ilya
| and others out to dry in favor of Sam. Any no one seems to put
| any blame on Satya and Microsoft. I am not an insider, so this is
| all just my perspective, but it looks curious in the least.
| Gee101 wrote:
| OpenAI definitely has some value. I work as a DevOps engineer and
| I use it quite a few times a day.
|
| It's replacing a lot of my Google searches. I also see OpenAI
| used by people around me in the office.
|
| So they definitely have first mover advantage and if they can
| keep up with competitors they can take a big chunk of the market.
| elAhmo wrote:
| Some value, of course. 157 billion... that is harder to
| justify.
| erulabs wrote:
| A 10% chance of making $100 costs $10.
|
| To make a 10x return, OpenAI would need to be worth 1.6T.
|
| So investors are thinking that there is a about ~10% chance of AI
| growing to about ~10% the size of the service industry (10% of
| service industries 16T/year is 1.6T, 10% chance => 160B).
|
| While I'm not sure I agree, this math does actually make more
| sense than you'd think given the sticker-shock of 160B for a
| young company.
|
| What I'm more curious about is the (as far as I know) non-public
| guesses as to which industries openai believes it will take bites
| out of. Software? Service? An entirely new industry space?
| Assuming its going to just grow productivity by itself, and not
| crush other industries, the valuation seems off. For $160B, the
| expectation is more likely "this will result in no longer needing
| hundreds of thousands of employees" - but are we replacing their
| salaries wholesale with OpenAI contracts? Doubtful.
| scarmig wrote:
| On the other side of things, imagine OAI purchased something
| critical to their success from a near-monopoly producer. If
| they suddenly are devouring massive amounts of the economy, it
| will rationally attempt to increase its margins.
|
| Not to say that there aren't ways around it. But you'd also
| expect crazy valuations to be going up the supply chain. And
| TSMC is wildly undervalued if you believe in OAI's ideal
| scenario. Market is inconsistent here.
| ChrisArchitect wrote:
| [dupe] Discussion: https://news.ycombinator.com/item?id=41722742
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