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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 o
by erulabs 2y ago
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 2y agoOn 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.
- pants2 2y agoOr there's a 0.1% chance it becomes a $160T company if they're the first to develop superintelligence
- dartos 2y agoIs far faaaar lower than a 0.1% chance. You can’t predict breakthroughs and key members of the OG engineering team left.