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"During the dotcom bubble, companies IPOed with no revenue and no profit. In 2024, OpenAI is probably at $2 - $3 billion in revenue right now." That's cheating

by jerf 2y ago

"During the dotcom bubble, companies IPOed with no revenue and no profit. In 2024, OpenAI is probably at $2 - $3 billion in revenue right now." That's cheating; you moved from "companies" to "a specific company". Some specific companies had revenue in the dotcom bubble. There are plenty of AI companies today being valuated sky-high with currently no revenues (dunno how many have gone public, that has changed a lot since 2000), and there are plenty of "real", normal companies getting their valuations goosed by saying "AI" and not having any current revenues to show for that valuation rise. Most recently Apple put on something like 300 billion in valuation for their deal with OpenAI, but if you dig into the deal, neither of them are paying the other anything. The people selling shovels are doing well, if not necessarily as well as their stocks indicate, but so far there really isn't that much gold being found for all the shovels being sold. Not zero, not claiming it's zero, but it's nowhere near what the valuations imply.

sshine 2y ago
The way I've seen the dot-com bubble portrayed as bigger is: It was more likely that someone would throw money at your idea back then if it ended with ".com" than it is for someone to fund your idea today that ends with "using AI". I don't know why. Maybe it's interest rates. Maybe it is because the AI hype is so recently after the cryptocurrency hype. It was quite easy to make people dump their money into a cryptocurrency, and the crypto winners are still actively fishing for bigger fools while the AI hype is going on.
toddmorey 2y ago
Yes even for some companies with current revenue the multiples are extremely high. Really struggling to decide if AI is ultimately a winner take all market. Of course the very best models will require trillions in capital to train, but seems there also will be a long tail of local, smaller, and specialized models doing a majority of the workloads.

by jerf 2y ago

sshine 2y ago

The way I've seen the dot-com bubble portrayed as bigger is: It was more likely that someone would throw money at your idea back then if it ended with ".com" than it is for someone to fund your idea today that ends with "using AI". I don't know why. Maybe it's interest rates. Maybe it is because the AI hype is so recently after the cryptocurrency hype. It was quite easy to make people dump their money into a cryptocurrency, and the crypto winners are still actively fishing for bigger fools while the AI hype is going on.

toddmorey 2y ago

Yes even for some companies with current revenue the multiples are extremely high. Really struggling to decide if AI is ultimately a winner take all market. Of course the very best models will require trillions in capital to train, but seems there also will be a long tail of local, smaller, and specialized models doing a majority of the workloads.