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OpenAI's $150B valuation hinges on upending corporate structure, sources
- paulpauper 2y agoOpen Ai must be making some mad earnings that are not disclosed. Huge contracts I suppose. Meta was worth $100 billion pre-IPO but they were obviously very profitable and had lots of advertisers. It reminds me of Tesla. During 2020-2021 the stock went up 20x and it seemed irrational and the biggest bubble ever, but fast-forward to 2024 and Tesla cars everywhere especially in the Bay Area. The market correctly anticipated Tesla's popularity.
- JSDevOps 2y agoThe world is bigger than the Bay Area
- jewelry 2y agoI’d guess it’s some contracts that’s valueated at high multiple for all kind of reasons, like it’s enterprise deal so it’ll be there forever and only increase the amount; the apple deal probably was known back then but only public recently; the influential type of customer that could help them break into particular industries;
- martinky24 2y agoTesla is still very much a bubble. What about Tesla implies they should be worth that much more than, say, Toyota…?
- jillesvangurp 2y agoValuation is based on future, not past performance. Toyota is looking a bit stale and weak lately. They are loosing market share. Amongst others to BYD and Tesla in a market that Tesla single handedly created. And Toyota's portion of that is so pathetic it's barely worth talking about. It's gotten so bad that Toyota is currently actually outsourcing EVs to BYD at the same time that company is grabbing market share from them. Not a great look if you have to ask your fastest growing competitor to please build a product for you. Tesla is of course taking a few big bets that may or may not pay off. Many people are rightfully somewhat skeptical about all that but it is a bit disingenuous to portray them as just a car company given their growing number of "definitely not a car" type products and services. E.g. battery storage is bringing in quite a bit of revenue now for them and is one of the things that is rapidly growing. And of course the whole robots, AI, and FSD angle has lots of potential. Regardless of whether you believe Tesla can do that or not. This article is about OpenAI who is getting quite stellar valuations in that area. Tesla is of course part of that market. Toyota very much isn't. In short, Tesla might fail or they might succeed. In the same way Toyota might recover or they might not. To be honest, both companies have issues. But I have more confidence in Tesla than Toyota. Toyota seems a company without ambition and vision. Tesla can't be accused of that. Toyota's vision is to do what all their competitors are doing right now but in ten years. Tesla's vision is to do in ten years what nobody is doing right now. Again, you might not believe in any of that. But you might be wrong. That's the gamble you make in the stock market with either company. And the share price is just a reflection of what people buying shares right now believe.
- refurb 2y ago[flagged]
- jtriangle 2y agoMassive amounts of anti-fossil fuel powered car legislation being passed, or being talked about, and Tesla being the clear market leader in the electric vehicle space.
- treyd 2y agoIf you look at share price sure. But if only they could actually build their cars to meet demand and not have them constantly fall apart.
- buzzerbetrayed 2y agoHey look, Hyperbole. Fun!
- fallingknife 2y agoI hear endlessly how bad Teslas are from anonymous internet people who don't own them and the exact opposite from everyone I know IRL who does.
- mattmaroon 2y agoMy girlfriend owns a model Y and I could write a long list of reasons why they are poorly built and a nightmare to get serviced.
- tayo42 2y agoTo be fair your anonymous and that comment is on the internet
- gigatree 2y agonot anyonymous, that’s Matt Maroon
- mattmaroon 2y ago
- buzzerbetrayed 2y agoI’m not saying the should be valued higher. But it is at least notable that a Toyota has been the best selling car every year for the last 20 or so, until last year when it was the Model Y. Meanwhile Toyota has been caught unsure of if they should build gas, electric, or hydrogen cars. Fortunately, as a fan of Toyota’s cars, it seems like they’ve figured out a good strategy forward. But for every Toyota there is a BlackBerry, IBM, Reebok, or Blockbuster who doesn’t figure out how to adapt to a changing market in time.
- wkat4242 2y agoI think for Toyota's main market the hybrid model still makes very much sense. EV is still a huge premium. Nice if you live outside the city and can charge your car with your own solar panels. Too clumsy to deal with in the city with the scarce public charge points. And Toyota is a budget to mid range brand. For high end (the customers where the premium doesn't matter) they have lexus.
- hibikir 2y agoYou are using a pretty deceptive number when looking at the highest selling car. What is the biggest seller for Toyota? the RAV4, which helpfully counts as "not a car".
- wkat4242 2y agoIn the US maybe? Here in Europe I'm sure it's the corolla
- MrDarcy 2y agoI largely agree except with IBM. They may not be fashionable but they have 195B market cap and the stock price is up over 25 years.
- zeroonetwothree 2y agoBest selling vehicles of 2023: 1. Ford F series 2. Chevy Silverado 3. Ram Pickup 4. Toyota RAV-4 5. Tesla Model Y
- jordanb 2y ago> The market correctly anticipated Tesla's popularity. It seems like the market has priced in gains that have yet to materialize in Tesla's fundamentals. They're still far smaller than auto makers with much lower valuations.
- jjulius 2y ago>The market correctly anticipated Tesla's short-term popularity. FTFY
- reducesuffering 2y agoIf you're going to make a 4 letter comment, at least be correct. Tesla in no way could be thought of as "short-term popularity." Every year, they've had increasing sales, about +20% between 2022 to 2023, and their latest quarter is still the highest sales of any quarter, on track to make $100 billion annual.
- jjulius 2y agoYet, as mentioned elsewhere in this same comment chain, they're almost certainly overvalued and in a bubble. Not only that, but their overall image has suffered over the last few years thanks to Musk. There are plenty of concerns over their inability to produce a product of actual high quality that doesn't consistently fall apart, and their product line is stagnating without any new cars (cars, not Cybertrucks). It's cool that sales have increased, but so many other signs point to their run being relatively short-lived that it's not an unreasonable viewpoint to expect them not to be as strong as they are long-term. Edit: Hell, even Musk has said they're not a car company anymore. Can anyone actually tell me what kind of company they are, then? How can I expect for them to be as successful if they're having some kind of existential crisis, for lack of a better word? Good luck getting your employees moving towards the same mission if we're not entirely clear what that is. Edit 2: Further, they've only been selling their current lines of cars for twelve years. That's a relatively tiny amount of time compared to other leading manufacturers. That's short, and all signs point to them not really knowing where to go from here. Just because there's been growth doesn't mean it's guaranteed to continue. Downvote this comment too, disagree with it, I don't really care - time will tell how this shakes out.
- reducesuffering 2y agoKarpathy very recently said Tesla is a robotics company. They're making the machines that make machines.
- mattmaroon 2y agoTesla sells like 1% of the cars and has like 50% of the market cap, and it’s not because their margins are so high. All the market correctly predicted is that the market would continue to incorrectly predict their value. As a mental exercise, imagine there’s a bubble that went on for 5 years. They sometimes go that long or longer. Do you not think 3 years in people would think they were seeing the market just having been correct the prior few? It would look exactly the way you view this.
- tarsinge 2y ago> All the market correctly predicted is that the market would continue to incorrectly predict their value. I don’t understand why so many don’t get this, especially after crypto currencies became a thing. The token can be DOGE or TSLA, the mechanism is the same, only marketing and PR content change, reality doesn’t matter. In fact Musk already said Tesla is not a car company anymore. Crypto opened the eyes of a lot of smart CEOs, and not in a good way, and investors look away as long as the dance continue.
- dkrich 2y agoThis has been a phenomenon of the endless liquidity train of the past 3-4 years. People doing very stupid things with money knowing more is always coming. There are certain stocks like palantir that are very obviously in bubbles where the market celebrates its inclusion in a stock index and sends the shares up 15%. The CEO just self produced a video recognizing retail traders and using the term “tendies.” The mistake this cycle though has been to assume that won’t work
- PromptCoding 2y ago[dead]
- toomuchtodo 2y agohttps://www.levels.fyi/blog/openai-compensation.html https://www.levels.fyi/blog/openai-compensation.html
- tazu 2y ago"AI reminds me of the internet in 1999." -- Peter Thiel[1] [1]: https://www.youtube.com/watch?v=SYRunzR9fbk https://www.youtube.com/watch?v=SYRunzR9fbk
- blurty 2y ago[dead]
- yumraj 2y agoWasn’t that followed by a dot-com bubble burst, and then things actually started taking shape. So are we expecting a ai bubble burst as well?
- ramesh31 2y ago>AI reminds me of the internet in 1999." -- Peter Thiel[1] It just feels like we're still in the pre-Navigator days though, circa '94. All of this complex orchestration work needs to be baked into a single model. I don't want to learn how to implement a multimodal agent system. I want to tell something what to do and have it do it for me perfectly with no more interaction than a simple prompt. Fortunately this is just a software engineering problem now, not a CS one.
- kylecazar 2y agoI agree completely. The companies I'm currently most excited about are all working on making some sort of E2E platform, weaving together all of the component pieces into a cohesive whole.
- tmpz22 2y agoThe UI is also trash for many workflows. Copy paste? Little comment based autocomplete? We can't do better then that at all?
- fragmede 2y agoAider and Openinterpreter have a better UX than using ChatGPT via a website.
- xyst 2y agoNews of the fed rate cut and the ultra hyped valuations are returning.
- dehrmann 2y agoThere are only so many places you can put your money--treasuries, bonds, real estate, equities, precious metals, crypto. With interest rates going down, fixed-income looks a lot less interesting, so... real estate? Equities?
- rvz 2y agoThe pyramid scheme of raising money each year to avoid self-bankruptcy of billions of dollars worth of inference and training costs a year now must expand to investors in the middle east. (As US investors are almost out of cash and averaging themselves up.) This scheme will soon become unsustainable like the last time the tech industry corrected in 2022. Hopefully the participants don't experience any down-rounds or devaluations along the way. (It happened to many over-valued startups like Klarna, and Stripe and OpenSea.)
- John23832 2y agoWhile I do believe the ever increasing “more money for a trillion dollar ai company scheme” is not infinitely viable, in what world are us investors running out of money? > Hopefully the participants don't experience any down-rounds or devaluations along the way. (It happened to many over-valued startups like Klarna, and Stripe and OpenSea.) Klarna is a debt as a service company. They were made to exist in an easy money world. Opensea is a fraud as a service company. They existed in the crypto (more specifically nft) craze. Stripes down round was due to changing economic winds, nothing due to the softening of their business None of these are analogous to OpenAi.
- deleted 2y ago[deleted]
- d--b 2y agoWhy do you say the middle east isn’t already in?
- CuriouslyC 2y agoOpenAI is going to end up in Microsoft's pocket.
- _fat_santa 2y agoMy prediction is this. 1. OpenAI hypes what they could do with their AI to get insane funding rounds (we are here) 2. OpenAI takes that money and tries to build the thing that they pitched in #1. 3. They will struggle to meet the goals set out in #1 and funding will slowly dry up 4. Training costs will overwhelm them and they will go bankrupt 5. MS buys them out for pennies on the dollar and integrates their models with their Copilot brand.
- mattmaroon 2y agoSeems pretty obvious everyone involved wants to cast off the not for profit structure and make a trillion dollars. Might as well get it over with.
- dimal 2y agoI wish they would be at least forced to change their name. It’s like if Exxon called themselves The Free Renewable Energy Company. It’s misleading to consumers. In tech, we all know it’s BS, but the average consumer might not. It seems like an argument could be made that “OpenAI” in violation of FTC truth in advertising rules.
- frou_dh 2y agoIt could be a lot more closed than it is, from a general public perspective. i.e. the company having this cool AI and we not even getting the opportunity to use it at all.
- FLT8 2y agoThey couldn't be, realistically, any more closed without being an essentially infinite money sink of the kind even nation states would struggle to fund long-term. It's the public using it that's helping offset costs and also giving them the usage data that they need to iterate on the design.
- wkat4242 2y agoUmm why would they bother developing a product if they're not selling it to customers?