5 ms·

They aren't reporting anything yet. What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentatio

by manquer 6mo ago

They aren't reporting anything yet. What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation. Both will do public reporting only when they IPO[4] and have regulatory requirement to do so every quarter. For private companies[1] reporting to investors there are no fixed rules really[3] Even for public companies, there is fair amount of leeway on how GAAP[2]expects recognize revenue. The two ways you highlight is how you account for GMV- Gross Merchandise Value. The operating margin becomes very less so multiples on absolute revenue gets impacted when you consider GMV as revenue. For example if you consider GMV in revenue then AMZN only trades at ~3x ($2.25T/$~800B )to say MSFT($2.75T/$300B) and GOOG ($3.4T/$400B) who both trade at 9x their revenue. While roughly similar in maturity, size, growth potential and even large overlap of directly competing businesses, there is huge (3x / 9x) difference because AMZN's number includes with GMV in retail that GOOG and MSFT do not have in same size in theirs. --- [1] There are still a lot of rules reporting to IRS and other government entities, but that information we (and news media) get is from investors not leaks from government reporting - which would be typically be private and illegal to disclose to public. [2] And the Big 4 who sign off on the audit for companies prefer to account for it. [3] As long as it is not explicit fraud or cooking the books, i.e. they are transparent about their methods. [4] Strictly this would be covered in the prospectus(S-1) few weeks before going public and that is first real look we get into the details.

aurareturn 6mo ago
They aren't reporting anything yet. What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation. The $24b figure is literally in OpenAI's announcement. The $19b ARR and $6b added in Feb came directly from Anthropic CEO recently.
- bandrami 6mo ago
  Announcing isn't reporting. Am I the only one old enough to remember Enron?
- manquer 6mo ago
  I am reminded of the "I declare bankruptcy" meme from the 2000's TV series Office. When we say reporting it means there are statutory submissions with an auditor signing off, with legal liability. As the other reply referenced consequences for doing this incorrectly can be severe - Arthur Anderson is no more after all because of Enron. A Press Release (of a private entity) does not have to satisfy this high bar. Press release does mean no constraints, for public companies, disclosure of important information by officers and other insiders have strong controls. Even if its the just a rocket/poop emoji on a casual social media platform. Lawyers have to refile with the SEC in the expected format. Even private companies have restrictions on not claiming things fraudulently to investors, but these are accredited investors with lesser controls than retail.
- diatone 6mo ago
  Until they’re using consistent methods of reporting those figures, they’re not comparable. Same as any other company pre vs post IPO
  - aurareturn 6mo ago
    Was referring to this: What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation.
- deleted 6mo ago
  [deleted]
- lelanthran 6mo ago
  > The $24b figure is literally in OpenAI's announcement. And? That's not a legislated report; they can use whatever mechanism they want to, without disclosure, to produce numbers. Lets wait until they are regulated as a public company, then their mechanism has to be both aligned with what legislation requires as well as clearly documented in their report.
  - seanhunter 6mo ago
    > they can use whatever mechanism they want to, without disclosure, to produce numbers. That would be fraud against whoever participated in this round, so no. Just because they aren't regulated doesn't mean they are literally free to do whatever they want to close the round.
    - adgjlsfhk1 6mo ago
      it would be fraud only if they're also telling their investors the same numbers.
    - lelanthran 6mo ago
      > Just because they aren't regulated doesn't mean they are literally free to do whatever they want to close the round. What makes you think their public announcements are aligned with what they give prospective investors?
      - seanhunter 6mo ago
        The fact that in all the rounds I have been involved in all public announcements related to the round go through the legal team to check for possible material misstatements that could cause exactly this kind of problem.
        lelanthran 6mo ago
        > The fact that in all the rounds I have been involved in all public announcements related to the round go through the legal team All public announcements go through the legal team, regardless of whether it's related to the round or not.
- robonot 6mo ago
  True. That's reporting and they are also reporting numbers internally, which are getting leaked.
SilverElfin 6mo ago
Does the GAAP accounting matter if everyone passively buys shares due to the new fast entry rules, which corruptly will force us all to buy into these companies? The fundamentals and true value seem less relevant than ever: https://www.benzinga.com/markets/tech/26/03/51248353/michael-burry-flags-structural-manipulation-risk-in-nasdaq-rules-ahead-of-potential-spacex-listing https://www.benzinga.com/markets/tech/26/03/51248353/michael...
- manquer 6mo ago
  Diluting the index entry rules, only devalues the index utility. When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety. More likely than not, most of us are already holding stock in these companies one way or another. All the Mag 7 hold a major chunk of OAI and Anthropic stock anyway, slower entry does not make it less risky for us. Even if the big tech companies did not hold any stock, they are still the biggest vendors and their own order books is hugely impacted by the AI demand from these two ( and others in this space), either way we are all in this together.
  - qotgalaxy 6mo ago
    [dead]
  - minraws 6mo ago
    I personally find this is the correct solution, since indexes are over-inflated either way, this brings much needed sanity to the index. Your index is now worth much more or much less based on how you view the AI bubble and you are forced to understand and correct your forward looking investments accordingly. Passive investments are good, but if taken too far as they clearly have been in the last decade they become a scam. Everyone is SIPing into it, and there is infinite liquidity. Until one big whale finally decides they are booking it, then all hell will break loose on the same damn day.
  - chronc6393 6mo ago
    > When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety Doubt it. The world does not allow perfect competition.

by manquer 6mo ago

aurareturn 6mo ago

They aren't reporting anything yet. What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation. The $24b figure is literally in OpenAI's announcement. The $19b ARR and $6b added in Feb came directly from Anthropic CEO recently.

bandrami 6mo ago
Announcing isn't reporting. Am I the only one old enough to remember Enron?
manquer 6mo ago
I am reminded of the "I declare bankruptcy" meme from the 2000's TV series Office. When we say reporting it means there are statutory submissions with an auditor signing off, with legal liability. As the other reply referenced consequences for doing this incorrectly can be severe - Arthur Anderson is no more after all because of Enron. A Press Release (of a private entity) does not have to satisfy this high bar. Press release does mean no constraints, for public companies, disclosure of important information by officers and other insiders have strong controls. Even if its the just a rocket/poop emoji on a casual social media platform. Lawyers have to refile with the SEC in the expected format. Even private companies have restrictions on not claiming things fraudulently to investors, but these are accredited investors with lesser controls than retail.
diatone 6mo ago
Until they’re using consistent methods of reporting those figures, they’re not comparable. Same as any other company pre vs post IPO
- aurareturn 6mo ago
  Was referring to this: What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation.
deleted 6mo ago
[deleted]
lelanthran 6mo ago
> The $24b figure is literally in OpenAI's announcement. And? That's not a legislated report; they can use whatever mechanism they want to, without disclosure, to produce numbers. Lets wait until they are regulated as a public company, then their mechanism has to be both aligned with what legislation requires as well as clearly documented in their report.
- seanhunter 6mo ago
  > they can use whatever mechanism they want to, without disclosure, to produce numbers. That would be fraud against whoever participated in this round, so no. Just because they aren't regulated doesn't mean they are literally free to do whatever they want to close the round.
  - adgjlsfhk1 6mo ago
    it would be fraud only if they're also telling their investors the same numbers.
  - lelanthran 6mo ago
    > Just because they aren't regulated doesn't mean they are literally free to do whatever they want to close the round. What makes you think their public announcements are aligned with what they give prospective investors?
    - seanhunter 6mo ago
      The fact that in all the rounds I have been involved in all public announcements related to the round go through the legal team to check for possible material misstatements that could cause exactly this kind of problem.
      - lelanthran 6mo ago
        > The fact that in all the rounds I have been involved in all public announcements related to the round go through the legal team All public announcements go through the legal team, regardless of whether it's related to the round or not.
robonot 6mo ago
True. That's reporting and they are also reporting numbers internally, which are getting leaked.

SilverElfin 6mo ago

Does the GAAP accounting matter if everyone passively buys shares due to the new fast entry rules, which corruptly will force us all to buy into these companies? The fundamentals and true value seem less relevant than ever: https://www.benzinga.com/markets/tech/26/03/51248353/michael-burry-flags-structural-manipulation-risk-in-nasdaq-rules-ahead-of-potential-spacex-listing https://www.benzinga.com/markets/tech/26/03/51248353/michael...

manquer 6mo ago
Diluting the index entry rules, only devalues the index utility. When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety. More likely than not, most of us are already holding stock in these companies one way or another. All the Mag 7 hold a major chunk of OAI and Anthropic stock anyway, slower entry does not make it less risky for us. Even if the big tech companies did not hold any stock, they are still the biggest vendors and their own order books is hugely impacted by the AI demand from these two ( and others in this space), either way we are all in this together.
- qotgalaxy 6mo ago
  [dead]
- minraws 6mo ago
  I personally find this is the correct solution, since indexes are over-inflated either way, this brings much needed sanity to the index. Your index is now worth much more or much less based on how you view the AI bubble and you are forced to understand and correct your forward looking investments accordingly. Passive investments are good, but if taken too far as they clearly have been in the last decade they become a scam. Everyone is SIPing into it, and there is infinite liquidity. Until one big whale finally decides they are booking it, then all hell will break loose on the same damn day.
- chronc6393 6mo ago
  > When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety Doubt it. The world does not allow perfect competition.