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What is the big risk here? He has the cash to burn and he has full control of his position. Nothing will happen to him if he wastes a few Billions. He is not so
by akudha 1y ago
What is the big risk here? He has the cash to burn and he has full control of his position. Nothing will happen to him if he wastes a few Billions. He is not some poor single mom who has to decide between fixing her car and paying for kid’s Christmas presents
- paxys 1y agoSpending $15B is a risk. Yes they have the money, but we're talking a quarter of Meta's annual income. That's not nothing. And money concerns aside, Meta needs to be a major player in AI. If they have made the wrong bet with Scale AI & Wang then the company will suffer in the long term.
- disgruntledphd2 1y agoIt's surely mostly a stock deal though, right? So they won't take the same hit to free cash flow that they might otherwise do. Still a lot of money and I'm not sure it's worth it. Might be more like Whatsapp than Instagram, tbh.
- paxys 1y agoIt's a funding round. Scale doesn't need Meta stock, they need cash to burn.
- HDThoreaun 1y agoMeta is doing $10 billion in buybacks a quarter. Cash vs stock deal doesnt make a difference I think
- coliveira 1y agoYou're thinking in the wrong scale. Meta is a $1.7T company, for them a $15B investment is less than 1% of the company. In the span of a year, this is negligible money.
- twelve40 1y ago> Meta needs to be a major player in AI Honest question, why do they so existentially need to be a major player in AI? It's a social network that connects people, serves UGC and some spam/ads, and sells advertisement. Same but with photos for IG, same but with messages for Whatsap. Which part of this will die without AI? If they are obsessed with chatting with an AI bot on Whatsapp, just plug in grok or openai like Telegram, is that the killer feature worth bazillions of dollars? (everything else seems like a failed experiment, VR, Libra, Facebook phone, whatever, nobody even remembers half these things)
- nroets 1y agoIf Scale never creates value, he will lose billions of his own money due to his indirect holding in Meta.
- mlinhares 1y agoI don't think people understand that once you're a billionaire with full ownership of your business and no risk of being ousted, making or losing billions is irrelevant.
- RankingMember 1y agoBillionaires don't stop caring about looking like dumbasses just because they're extremely wealthy.
- dghlsakjg 1y agoIf this is true, then evidence indicates that I have a different definition of what "looking like a dumbass" means than many of our billionaires.
- RankingMember 1y agoIn light of these (accurate) critiques, I think I should've gone with my original wording, which referred to them still caring about their legacy regardless of how many billions they had. That's more what I was going for, but I dumbed it down, apparently too much.
- shermantanktop 1y agoMaybe, but it doesn’t seem to stop them from actually looking like dumbasses. But that wealth attracts fans who constantly proclaim that their latest idea is brilliant. Maybe we should pity the poor billionaires, hopped up on T or ketamine and trapped in an echo chamber…but I’ll think they’ll be ok.
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- laborcontract 1y agoThe risk here is that you've now put a person with no track record of success outside of being good at sales in charge of your AI efforts. You're betting that he's going to be the one to attract talent. The right leadership might be able to get talent to work for a discount. The wrong one would lead to talent not coming at all.
- imiric 1y agoIf Meta is known for anything besides user privacy violations it's for taking risks that often pay off. They were laughed at for overpaying for Instagram and Whatsapp, yet both were instrumental to their current success. Their continued bet on VR is still highly criticized, yet they were the first Big Tech company in the space, they're the current market leaders, and I'm sure it will have huge ROI in the near future. So is this bet on Wang, as ludicrous as it may seem now.
- laborcontract 1y agoI've been all for it, look at my comment elsewhere in this thread. For me this is a huge mistake of a transaction that's neither accretive financially nor talent-wise. This isn't the Instagram or Whatsapp transaction. Scale's been exclusively in the data labeling space. Let's put this into perspective. OpenAI bought Jony Ive for about $5bln. Meta spent 3x that on Wang.
- imiric 1y agoI'm not familiar with Scale, but data labeling can make or break a ML model. So if Scale is good at this, the $14B investment will pay itself off in no time.
- laborcontract 1y agoThere was quite loud reporting earlier this (or last?) year that Scale's data was so poor that it led to a great deal of setbacks, scrambling, and friction between the two companies. That reporting was at the top of my mind when I read this news, so I was even more baffled. Imagine being the people at Meta who've had to deal with Scale now seeing Mark buy Scale's CEO for $14bln.
- vonneumannstan 1y ago>What is the big risk here? That this is clearly the wrong person to hire? Maybe Demis or Ilya is worth $15B but Wang? Extremely odd choice...
- OtherShrezzing 1y agoI don’t think either Demis or Ilya are available for $15bn. They’re already both comfortably billionaires. Demis seems a sensible candidate for heir to the top job at Google in the long term. Ilya is away focusing on super intelligence. It’s not clear to me why either would take a subservient role in a company flailing incoherently around AI, rather than stick with the incredibly high-leverage opportunities they both have now.
- vonneumannstan 1y agoAgreed but if you're paying $15B for a single person you should at least aim high...
- peanuty1 1y agoHow about $15B for Mira Murati, OpenAI's former CTO?
- motoxpro 1y agoWhat a weird way to frame a business decision.
- deleted 1y ago[deleted]
- bko 1y agoCash is the least concern. I listened to a podcast about the history of Microsoft and there were times where Gates said "at least it was only money" or something to that effect. Microsoft floundered an entire decade on mobile and Windows Vista when they were going to lose out on Google that was literally paying OEMs to use their software and Apple, who had a vertical stack and made money off hardware. Huge setback in terms of focus that took them a long time to recover from. The main constraint is focus of talent to work on one thing. This is a huge move in terms of coordinated effort into this space that may or may not pay off.
- paxys 1y agoThere's a pretty common saying in the tech industry - "if you can solve a problem by throwing money at it then it isn't really a problem".
- hn_throwaway_99 1y agoI've been in the tech industry a quarter century, I've never heard this "pretty common saying" before, and most importantly I don't think it makes any sense. If anything, tech excels at disruption, where smaller competitors and new ideas are able to solve problems where "just throwing money at it" has failed.
- paxys 1y ago> I don't think it makes any sense > tech excels at disruption, where smaller competitors and new ideas are able to solve problems where "just throwing money at it" has failed I don't think you understand the saying then, because this is exactly its point.
- hn_throwaway_99 1y agoD'oh, I fail at reading comprehension - I read the "can" as "can't" for some reason. Dunce cap for me.
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- Invictus0 1y agoAbsolutely bonkers perspective
- lr4444lr 1y agoThe risk is the lost time by betting on the wrong horse. I don't know much about Wang, but the current phase of the AI race will likely shake out winners and losers of the tech industry who persist for many years to come. Being first to achieve certain milestones matters a lot.
- layer8 1y agoNot betting on any horse is unlikely to make you a winner either, however.
- deleted 1y ago[deleted]
- nova22033 1y agoAlso..he can't be fired by the board.
- rs186 1y agoEh... 15billion is a lot of money.