5 ms·

I'm old enough to remember when companies worth $1 billion were called "unicorns." Now we have a company raising 122 times that? Valued at nearly 1000 times tha

I'm old enough to remember when companies worth $1 billion were called "unicorns." Now we have a company raising 122 times that? Valued at nearly 1000 times that...? At least they're throwing consumers a bone via the ARK deal. It's crazy how little AI exposure is available to anyone who isn't already wealthy and/or connected.

chilipepperhott 6mo ago
I would not call an effective 2.9% expense ratio "throwing a bone".
- munk-a 6mo ago
  Also, the valuation for such a debt laden company should be viewed with great skepticism. I'm afraid a lot of mutual funds will end up holding the bags.
- mizzao 6mo ago
  It's not that far off from the standard 2% mgmt fee and 20% of excess performance?
nine_k 6mo ago
I think this is reality-distortion field rivaling that of Jobs', and a crisis of faith. Nobody apparently believes that capital is worth investing into anything but AI.
- randomNumber7 6mo ago
  > Nobody apparently believes that capital is worth investing into anything but AI. This is the main reason we see this insane investment into AI imo. If you imagine having lots of money, where should you invest that currently? Housing market: Seems very overvalued (at least in germany). Also with the current uncertainty and inflation its hard to make an investment that pays back over 20-30 years. So building is also difficult. Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before. Gold: Only if you are paranoid about collapse of society. It doesn't make sense to invest into s.th. without interest rates. Crypto: Same as gold, but better if you like gamling. I would assume most people who are very rich don't gamble with most of their fortune.
  - nine_k 6mo ago
    Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] :-\ Valuations are not as crazy, but I bet there'll going to be a lot of demand in the coming decade, unfortunately. Chip production, too, of course, but it's overflowing with money already, apparently. It's growing though, because there are real actual shortages of stuff like RAM and SSDs, there's money to be made immediately if you can. Chinese RAM manufacturers are building out like crazy. [1]: https://www.ultimamarkets.com/academy/anduril-stock-price-how-to-buy-valuation-ipo/ https://www.ultimamarkets.com/academy/anduril-stock-price-ho... [2]: https://www.marketscreener.com/quote/stock/RHEINMETALL-AG-436527/consensus/ https://www.marketscreener.com/quote/stock/RHEINMETALL-AG-43...
    - teeray 6mo ago
      > Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] Only viable if you’re okay with the ethical implications of funding war.
      - nine_k 6mo ago
        Would you be fine with the ethical implications of funding the industry to fight WWII? Would you consider funding Ukrainian military unethical? Or Taiwanese? This is, sadly, not theoretical, and I'm afraid we'll soon see more of such choices, not fewer.
    - zer00eyz 6mo ago
      > it would be military tech Anduril is the only company in this sector in the US that has any promise and they aren't even public. Most of us are not going to get our hands on this. Traditional defense sector looks more like Jeep, or Kodak...
      - nine_k 6mo ago
        The demand for more Patriot missiles is large, now that much of the stockpiles have suddenly been spent. Raytheon should do fine just based on that.
- roncesvalles 6mo ago
  It's the result of too much echo chambered bullshit floating around daily about how capable LLMs really are. It's literally crypto/blockchain all over again. It's one big lie that a lot of people have bought into which causes it to self-perpetuate, like religion.
- bandrami 6mo ago
  But they're really cagey about actually handing money over to them today
- dlev_pika 6mo ago
  I wonder what is not getting invested in bc AI has been crowding out everything else since 22. It has to be brutal out there for everybody else, if all the money is going to AI.
- burnt-resistor 6mo ago
  That's the tao of hyper-financialization. It must keep growing irrational exuberance big and up forever like stonks or it bursts like DotCom and tulip mania. It's funny money that cannot be liquidated for real value for more than a tiny fraction of the imaginary trillions being thrown around. Similarly, Nvidia $4T mkt cap makes absolutely no sense when it has but a few incestuous customers-parters-investors throwing around tens of billions each per year devoid of fundamentals like essential service offerings that turn a profit. Those handful of whale customers will make their own chips or cease buying large qtys at any time.
- woah 6mo ago
  OpenAI is making $24b a year. It's a 32x revenue multiple. High, but not insane. Spinning this as a story of overinvestment doesn't make sense.
  - duchef 6mo ago
    Are you conflicting price to earnings to price to revenue?
  - BadCookie 6mo ago
    32x earnings is high. 32x revenue is probably insane.
- satvikpendem 6mo ago
  And not even actual capital either, as much of the investment amounts into AI have been through cloud and GPU credits so that AWS or Microsoft Azure don't actually have to hand over billions in straight cash.
gavinray 6mo ago
> At least they're throwing consumers a bone via the ARK deal. I had to look this up. There's a venture fund you can invest in with as little as $500 as a consumer -- though it's limited to quarterly withdrawals. https://www.ark-funds.com/funds/arkvx https://www.ark-funds.com/funds/arkvx The fund is invested in most of the hot tech companies.
- squirrellous 6mo ago
  ARK was all the rage around early pandemic time when wallstreetbets was in the news a lot. Most people probably know it from then.
- bluecalm 6mo ago
  ARK funds has cult like following but then again they are a typical high beta player who outperforms in hot markets and heavily underperforms in cold ones. Fees are high. The CEO (CIO) is a women who looks for investment advice in the Bible and asks God for his thoughts (I am not joking). If anything being associated with ARK in any form is a big negative signal.
rvz 6mo ago
> At least they're throwing consumers a bone via the ARK deal. It's crazy how little AI exposure is available to anyone who isn't already wealthy and/or connected. It is deliberate. Period. It's always been known that you make money in the private markets and pre-IPO companies and retail is the final exit for insiders and early investors. Retail is not allowed to be early into these companies (Because that would ruin the point of being an insider) and this "exposure" has to be at the near top.
- monkeydust 6mo ago
  There are ways now for retail to get in to these companies including, check out hiive or equityzen...just beware of massive dilution.
- lotsofpulp 6mo ago
  Who are "these" companies? Did retail get into Google, Facebook, Amazon, Tesla, etc before the top? Also, aren't AI businesses losing a lot of money each year? Pretty sure there is some risk involved that is not good for retail.
- deleted 6mo ago
  [deleted]
a13n 6mo ago
VCX (Fundrise) has way more exposure than ARKVX
- xlbuttplug2 6mo ago
  It's also trading at a huge premium. Probably worth a read if you're considering it: https://www.morningstar.com/funds/fundrise-innovation-is-not-worth-getting-up https://www.morningstar.com/funds/fundrise-innovation-is-not...
carlosjobim 6mo ago
The money is worth much much less than it was before, we live in times of global hyper inflation.
frankfrank13 6mo ago
An ARK ETF is a smell to me. Besides, based on their holdings, i would never invest. 18% of the fund is SpaceX
torginus 6mo ago
Even a billion dollars is crazy money. If you have a company with a subscription service that costs $100 yearly, you have ~2m customers, with a 50% profit margin. Your company makes ~100m every year in profit. Imo that's what is actually worth a billion dollars, maybe even a bit less.
- hunterpayne 6mo ago
  That company is probably worth about $8b, FYI. Obviously that's an estimated average but a P/E ratio of 80 give you that valuation.

chilipepperhott 6mo ago

I would not call an effective 2.9% expense ratio "throwing a bone".

munk-a 6mo ago
Also, the valuation for such a debt laden company should be viewed with great skepticism. I'm afraid a lot of mutual funds will end up holding the bags.
mizzao 6mo ago
It's not that far off from the standard 2% mgmt fee and 20% of excess performance?

nine_k 6mo ago

I think this is reality-distortion field rivaling that of Jobs', and a crisis of faith. Nobody apparently believes that capital is worth investing into anything but AI.

randomNumber7 6mo ago
> Nobody apparently believes that capital is worth investing into anything but AI. This is the main reason we see this insane investment into AI imo. If you imagine having lots of money, where should you invest that currently? Housing market: Seems very overvalued (at least in germany). Also with the current uncertainty and inflation its hard to make an investment that pays back over 20-30 years. So building is also difficult. Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before. Gold: Only if you are paranoid about collapse of society. It doesn't make sense to invest into s.th. without interest rates. Crypto: Same as gold, but better if you like gamling. I would assume most people who are very rich don't gamble with most of their fortune.
- nine_k 6mo ago
  Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] :-\ Valuations are not as crazy, but I bet there'll going to be a lot of demand in the coming decade, unfortunately. Chip production, too, of course, but it's overflowing with money already, apparently. It's growing though, because there are real actual shortages of stuff like RAM and SSDs, there's money to be made immediately if you can. Chinese RAM manufacturers are building out like crazy. [1]: https://www.ultimamarkets.com/academy/anduril-stock-price-how-to-buy-valuation-ipo/ https://www.ultimamarkets.com/academy/anduril-stock-price-ho... [2]: https://www.marketscreener.com/quote/stock/RHEINMETALL-AG-436527/consensus/ https://www.marketscreener.com/quote/stock/RHEINMETALL-AG-43...
  - teeray 6mo ago
    > Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] Only viable if you’re okay with the ethical implications of funding war.
    - nine_k 6mo ago
      Would you be fine with the ethical implications of funding the industry to fight WWII? Would you consider funding Ukrainian military unethical? Or Taiwanese? This is, sadly, not theoretical, and I'm afraid we'll soon see more of such choices, not fewer.
  - zer00eyz 6mo ago
    > it would be military tech Anduril is the only company in this sector in the US that has any promise and they aren't even public. Most of us are not going to get our hands on this. Traditional defense sector looks more like Jeep, or Kodak...
    - nine_k 6mo ago
      The demand for more Patriot missiles is large, now that much of the stockpiles have suddenly been spent. Raytheon should do fine just based on that.
roncesvalles 6mo ago
It's the result of too much echo chambered bullshit floating around daily about how capable LLMs really are. It's literally crypto/blockchain all over again. It's one big lie that a lot of people have bought into which causes it to self-perpetuate, like religion.
bandrami 6mo ago
But they're really cagey about actually handing money over to them today
dlev_pika 6mo ago
I wonder what is not getting invested in bc AI has been crowding out everything else since 22. It has to be brutal out there for everybody else, if all the money is going to AI.
burnt-resistor 6mo ago
That's the tao of hyper-financialization. It must keep growing irrational exuberance big and up forever like stonks or it bursts like DotCom and tulip mania. It's funny money that cannot be liquidated for real value for more than a tiny fraction of the imaginary trillions being thrown around. Similarly, Nvidia $4T mkt cap makes absolutely no sense when it has but a few incestuous customers-parters-investors throwing around tens of billions each per year devoid of fundamentals like essential service offerings that turn a profit. Those handful of whale customers will make their own chips or cease buying large qtys at any time.
woah 6mo ago
OpenAI is making $24b a year. It's a 32x revenue multiple. High, but not insane. Spinning this as a story of overinvestment doesn't make sense.
- duchef 6mo ago
  Are you conflicting price to earnings to price to revenue?
- BadCookie 6mo ago
  32x earnings is high. 32x revenue is probably insane.
satvikpendem 6mo ago
And not even actual capital either, as much of the investment amounts into AI have been through cloud and GPU credits so that AWS or Microsoft Azure don't actually have to hand over billions in straight cash.

gavinray 6mo ago

> At least they're throwing consumers a bone via the ARK deal. I had to look this up. There's a venture fund you can invest in with as little as $500 as a consumer -- though it's limited to quarterly withdrawals. https://www.ark-funds.com/funds/arkvx https://www.ark-funds.com/funds/arkvx The fund is invested in most of the hot tech companies.

squirrellous 6mo ago
ARK was all the rage around early pandemic time when wallstreetbets was in the news a lot. Most people probably know it from then.
bluecalm 6mo ago
ARK funds has cult like following but then again they are a typical high beta player who outperforms in hot markets and heavily underperforms in cold ones. Fees are high. The CEO (CIO) is a women who looks for investment advice in the Bible and asks God for his thoughts (I am not joking). If anything being associated with ARK in any form is a big negative signal.

rvz 6mo ago

> At least they're throwing consumers a bone via the ARK deal. It's crazy how little AI exposure is available to anyone who isn't already wealthy and/or connected. It is deliberate. Period. It's always been known that you make money in the private markets and pre-IPO companies and retail is the final exit for insiders and early investors. Retail is not allowed to be early into these companies (Because that would ruin the point of being an insider) and this "exposure" has to be at the near top.

monkeydust 6mo ago
There are ways now for retail to get in to these companies including, check out hiive or equityzen...just beware of massive dilution.
lotsofpulp 6mo ago
Who are "these" companies? Did retail get into Google, Facebook, Amazon, Tesla, etc before the top? Also, aren't AI businesses losing a lot of money each year? Pretty sure there is some risk involved that is not good for retail.
deleted 6mo ago
[deleted]

a13n 6mo ago

VCX (Fundrise) has way more exposure than ARKVX

xlbuttplug2 6mo ago
It's also trading at a huge premium. Probably worth a read if you're considering it: https://www.morningstar.com/funds/fundrise-innovation-is-not-worth-getting-up https://www.morningstar.com/funds/fundrise-innovation-is-not...

carlosjobim 6mo ago

The money is worth much much less than it was before, we live in times of global hyper inflation.

frankfrank13 6mo ago

An ARK ETF is a smell to me. Besides, based on their holdings, i would never invest. 18% of the fund is SpaceX

torginus 6mo ago

Even a billion dollars is crazy money. If you have a company with a subscription service that costs $100 yearly, you have ~2m customers, with a 50% profit margin. Your company makes ~100m every year in profit. Imo that's what is actually worth a billion dollars, maybe even a bit less.

hunterpayne 6mo ago
That company is probably worth about $8b, FYI. Obviously that's an estimated average but a P/E ratio of 80 give you that valuation.