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OpenAI's $852B valuation faces investor scrutiny amid strategy shift, FT reports
- fraywing 6mo agoWhat happens if OpenAI collapses at this point? Is it just too big to fail given defense contracts and Microsoft? The Sora sunsetting marked a big shift towards enterprise focus and meeting Anthropic on the enterprise battlefield, but almost all engineers I work with or know are using Claude at this point exclusively. Anyone seeing differently?
- Invictus0 6mo ago> too big to fail genuine question, what do you think these words mean?
- jedberg 6mo agoI think it's code for "the government will have to bail them out".
- SturgeonsLaw 6mo agoSeems like Sam was angling for that with some of his China vs USA rhetoric
- vwvcxv 6mo agoWhy would they need a bail out? Their assets can be sold off, they can be taken over or be absorbed by another American entity. Absolutely no reason for a bail out. It may hurt the ego of Altman and Brockman - but that's their problem.
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- fraywing 6mo agoIf DoD systems are running on OpenAI infrastructure, you can't just pause them for 6 months during an acquisition. This gets far more complex than just "liquidation of assets".
- pessimizer 6mo agoBecause their assets would have been vastly overvalued. The bailout is when the government buys those assets at as close to that fictional valuation as they can, and likely then sells them back at their actual worth. > Absolutely no reason for a bail out. There's never been any reason for a bailout. It's just handing tax money to wealthy people who have made bad decisions.
- vjvjvjvjghv 6mo agoThe contract with the Pentagon is a good first step. Being a government contractor is pretty fail safe.
- pessimizer 6mo agoAt some point you reach a size when too many politicians and the people who own them have invested so much money that they're willing to take any size political hit in order to save themselves from personal losses when you fail.
- fraywing 6mo ago[dead]
- 0xC0ncord 6mo ago[dead]
- the__alchemist 6mo ago> Anyone seeing differently? There have been a stream of HN posts (I'm noticed this mainly in the past few weeks) implying some people prefer ChatGPT/Codex to Claude. Anecdotally, Claude on the $20/month plan can only run 1-3 queries per 4 hours before rate limiting, often stopping in the middle of a query. ChatGPT/Codex doesn't have this problem.
- post-it 6mo agoWhat the hell kind of queries are you running? I use Claude Pro all the time for asking questions, doing data analysis, writing side projects, and I very rarely get rate limited. I use Claude Max 20x at work and I rarely hit 10% session utilization, which implies even using Claude to write code all day only uses 2x the Pro token limit. Are you just telling it to try again when you get a response you don't like?
- nijave 6mo agoI get rate limited after about 1-2 hours having it generate, troubleshoot, and fix things running on k8s (Opus) We have Claude Teams at work and I don't think I've had issues there.
- StilesCrisis 6mo agoThat's crazy talk. I am on the $20 plan and I do hit the limit occasionally, but I get a few hours of usage before I do.
- whateveracct 6mo agothe rate limit is clearly stochastic. they've made their availability a skinner box and everyone is falling for it.
- taurath 6mo ago> Anecdotally, Claude on the $20/month plan can only run 1-3 queries per 4 hours before rate limiting Utterly not my experience. I use opus near daily for long research sessions (not all agent based). Are you throwing in 100k input tokens to every query?
- codetiger 6mo agoSeeing the same, Claude with every engineer. Even some non technical people moved to Claude from ChatGPT recently.
- liveoneggs 6mo agoNothing of note would happen if OpenAI collapsed. The same prompts will work with claude or gemini and the outputs will be good enough. I've also noted that 90% of technical users I encounter are on claude or mostly-claude via cursor (switching models here-and-there).
- parsimo2010 6mo agoClaude Code definitely has a head start, but there have been a few HN posts about a perceived nerfing of the intelligence and settings in the past month or so. Codex could capitalize on that weakness. They just introduced a $100 monthly 5x plan so they are at parity with the Claude Code plans. If Anthropic fiddles too much more with the settings then people will start to switch to Codex.
- thefounder 6mo agoCodex is just better than Claude but Claude is faster and has the better UI for vscode. That’s why I use Claude as main coder with codex(5.4 with xhigh effort) as mcp reviewer etc. It is clear to me that codex is a better programmer but the UI and speed are too much of a con to use it exclusively. Claude is just clumsy
- nico 6mo agoAt work there’s only codex right now (no approval yet for anthropic - OpenAI access was easier/faster through Microsoft) It was a pretty straightforward transition going from mostly using claude code, to now exclusively codex
- thefounder 6mo agoThe world would barely notice if both OpenAI and Anthropic “fail”. There is a lot of competition in this space
- nijave 6mo agoAll our engineers use Claude but all the AI features in our app are built on OpenAI models
- whateveracct 6mo agoand claude is actually meh too!
- hattmall 6mo agoThe amount of peripheral growth around it is even larger, tons of construction, utility company upgrades etc. There are more data centers under construction than there are currently operational data centers. So there is more than doubling of capacity coming from current buildout. If you include projects in the planning phase it is something like 4-6x expected capacity increase. The utility infrastructure buildout to meet this demand is equally huge. The warning signs are already starting to show up though, projects are being stalled, not filled out, blaming it on delays from China etc, but the funding is still present, the construction keeps going on of the next building even as the last one sits vacant and offline. The sky high purchases of property from connected individuals by site developers continue, even as pushback mounts and many places are passing anti-datacenter ordinances.
- gradus_ad 6mo agoClaude Code is extremely easy to set up and use. I suspect its saturation among software professionals is at the majority of the addressable market. What if there are no other killer apps for Enterprise? Only CC will produce the level of token churn that could drive huge profits for model providers. The Enterprise market is not as substantial as the rapid success of CC makes seem.
- echelon 6mo agoMissing the Claude Code market was the biggest swing and miss ever. Too busy trying to make TikTok for preteens with $4/generation videos that lost their novelty the minute IP was off the table. Didn't even identify the professional market in video was the correct place to invest, like Kling and ByteDance did. Chasing consumer killed their ascendency. Sam is a ruthless leader and knows how to build an empire, but he's also a distracted leader who chases too many flights of fancy. Without a golden goose like Zuckerberg, every mistake is a knife wound.
- vwvcxv 6mo agoThey get exactly what they deserve imo. Its pretty embarassing how they have blown the lead. Instead of finding a pathway toward selling tokens in volume (software production) they spread themselves thin and tried to hype up research, sora, web browser... blah blah. Again - they get what they deserve.
- Leynos 6mo agoIt amazed me that no one picked up on Codex last summer when it was effectively unlimited. I must have burnt through £10k worth of inference whilst still paying £20 a month
- SpicyLemonZest 6mo ago> "You have ChatGPT, a 1 billion-user business growing 50-100% a year, what are you doing talking about enterprise and code?" an early backer of OpenAI told FT. "It's a deeply unfocused company." This is exactly the dynamic I've been worried about. If you go to OpenAI's site to learn what they're all about, they're pretty clear about it: "ensure that artificial general intelligence benefits all of humanity", "Join us in shaping the future of technology". They think and I agree that ChatGPT is great, but the future of humanity does not depend on precisely how successful this one consumer chatbot is, and so it is not the company's focus. Anyone who understands OpenAI at even a basic level would recognize this, it's neither new nor subtle. I'm not sure how to avoid the conclusion that OpenAI investors do not understand OpenAI and are just revenue growth junkies.
- vwvcxv 6mo agoOAI has zero focus. How many acquisitions (value destructive it seems) and projects have they killed? Whats comical is Steve Jobs preached the notion of focus decades ago. Why can't people follow simple advice from someone who already acquired the scar tissue? Its literally madness. Sam shouldve been fired and stayed fired. He's great at raising money, but running the firm? Absolute basket case of a CEO in that regard.
- semiquaver 6mo agoThey’re investors. More or less by definition they only care about revenue growth.
- larrytheworm 6mo ago[flagged]
- taurath 6mo ago> ensure that artificial general intelligence benefits all of humanity Thus far based on their actions, a reasonable read would be that they believe “humanity” would be better off with fewer people. Whoever you think OpenAI is or was, you’d have to be willfully ignorant of the actions of those who run it to believe it and Sam now.
- cal_dent 6mo agojust maths. if they're as a capable as each other then x product cannot be worth multiples above y unless there's a clear USP. Arguably OpenAi's is brand recognition but given Antrhopic's recent growth that's less certain than a quarter ago
- Avicebron 6mo agoI was convinced they were going to go the openclaw or something similar route..pivoting into cybersec/enterprise makes sense if they are trying to copy anthropic, but it doesn't really telegraph any sort of differentiator
- vwvcxv 6mo agoits telegraphing that they have no vision
- qudat 6mo agoThis is the key. These frontier model companies are funneling all of their time and resources into scaling, how could they possibly be researching the next phase of AI? Once scaling hits the limit the money is gonna dry up. AGI is not gonna come from these companies
- hooch 6mo agoFor some reason the latest Claude Desktop release from Anthropic threw off its Claude branding and charm to chase after bland Codex Desktop app look and feels. Maybe they think OpenAI is doing something right?
- matchagaucho 6mo agoAs someone working in the enterprise space with OAI, this still feels like we're in the top of the first inning. Many teams remain anchored on equating AI with chat experiences, while a growing share of enterprise value is emerging from leasing compute clusters to run agentic workloads in containerized environments. OpenAI has built a cloud-first architecture that supports this model. The desktop experience and applications are sexy, but enterprise usage will likely skew heavily toward asynchronous, background processing.
- mandevil 6mo agoI know that people keep saying "we're early on here", but I take it as a negative signal that people keep thinking we are in the early innings here. Compared to previous generations of technology change, a great deal of time has passed, it should be a bit disconcerting that no one seems to have found a way to make money out of this yet. Look at previous killer apps- they came out quickly and were raking in money very quickly. The Apple II went on sale on June 10th, 1977. Visicalc went on sale October 17th, 1979- 860 days separate the two. Apple IPO'd in 1980 with a 21% operating margin! Netscape Navigator 1.0 released December 15th 1994, Amazon.com made its first sale July 16th 1995- 214 days later. AMZN IPO'd May 15th 1997, 883 days after Netscape 1.0 released to the public (they had raised <10 million dollars to that point, but chose not to have a profit because they kept re-investing all of their profit into expanding the business). We are already 1232 days since ChatGPT 1.0. So we're about 50% farther along than either of those killer apps. No one has figured out as good a business model for Generative AI as either of those were. To use the other great technology transformation of the past 50 years, cell phones, I have a bit of trouble figuring out the right comparison to ChatGPT 1.0. I can work backwards from today to ChatGPT 1.0 opening up to the public, that's about the difference from the iPhone 3G (the first one with an appstore, the real killer app) to the launch of the Motorola Razr, to give you an idea of how fast mobile technology moved. Do note that the Razr and the iPhone, like Visicalc, the Apple II, and Netscape 1.0 were hugely profitable for their companies, in a way that no one has demonstrated with Generative AI. Amazon is a bit of a special case, but they were not raising money, they were just re-investing cash that was being thrown off not as profits but into expanding the business. I don't believe that any AI company is generating cashflow the way that Amazon was in 1997, and the other companies mentioned here were GAAP-profitable.
- impulser_ 6mo ago"You have ChatGPT, a 1 billion-user business growing 50-100% a year, what are you doing talking about enterprise and code?" The ironic part about this is GPT models are by far the worst models to chat too. I think I rather talk to a wall than GPT-5.4. It so unpleasant. I feel bad for anyone who only experience with AI is ChatGPT.
- thefounder 6mo agowhat makes gpt 5.4 bad to chat ? To me it seems smart and does the job albeit it’s a bit slow. I’m using it only/mostly with the “pro” /xhigh reasoning
- strongpigeon 6mo agoI think it’s the default system prompts of ChatGPT. I do think it’s better with the “Professional” tone with “Less Emoji” but that’s just me.
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- blanched 6mo agoIn my experience, within one reply ChatGPT (compared to Claude) tends to: * generate a lot of text * answer at least a few of what it thinks might be follow up questions * restate its original answer a few times * suggest a follow up “if you want, I can turn that into…” It feels very tedious and noisy.
- impulser_ 6mo agoYeah, this perfectly sums it up. Especially the “If you want” at the end of every single reply.
- impulser_ 6mo agoThe way it converses is the least human like out of all models. It communicates like its writing markdown documents instead of just conversing normally like every other model does. You ask a question and it spits out a design doc instead of just answering the question like a normal human would.
- rvz 6mo agoSo now they are realizing that they are indeed in a bubble and OpenAI was extremely overvalued? Anthropic is also overvalued. Their revenue is not even recurring. It’s now “Annualised Revenue” due to token spend. These two companies are just vehicles of a pump and dump scheme. OpenAI is already off loading shares with “acquisitions” that do not make any sense because investors already think they are about to IPO and not worth the price. Also, one more thing… and it is called Deepseek.
- jmye 6mo agoIt’s an absolutely hilarious/absurd valuation for a company that has absolutely no path to do anything other than lighting money on fire, forever. I’d call it nonsense, but Tesla’s valuation proves the market runs on shenanigans, at this point, so whatever. If people want to meme OpenAI into a trillion dollar market cap, I guess let them?
- drivebyhooting 6mo agoLet them. And have pension funds and 401Ks automatically go for the ride too.
- jmye 6mo agoshrug Sue the fund managers investing in dumb memes, and the HR people who picked those benefit plans. Not sure what you’d propose, instead - they don’t have to directly tell anyone they know they’ll never turn a profit, yet.
- NewsaHackO 6mo agoAh yes, the weekly "ChatGPT is definitely going to fail, for real!" post, with absolutely no substance whatsoever. Still, they know it will definitely be on the front page, regardless. Make sure you subscribe to their pub!
- jesterson 6mo agoTo be fair, your comment doesn't have much substance as well
- jmyeet 6mo agoI don't believe that either Anthropic or OpenAI are going to survive the AI valuation crunch. Google, Meta and Microsoft will because they're not AI-only companies. There are four reasons why I believe this: 1. I honestly don't think that AI is all that useful for anything other than suppressing labor costs and I don't expect that to change in the short to medium term; 2. I really don't think Anthropic or OpenAI can ever satisfy their stratospheric valuations. I foreesee no cash flow possible that will arrive quick enough to make that happen; 3. Hardware costs will devalue the trillions invested in AI data centers. By 2030 the GPUs will probably be at least 3x as good. Bear in mind, it's just over 4 years between the 3090 and 5090 and that's 3x TFLOPS; and 4. China or other actors will make sure that proprietary LLMs won't be dominant. DeepSeek was a shot across the bow. China in particularly won't want a US tech company to dominate this space. The increasing RAM in local, relatively cheap computers will make this more and more viable. Bonus prediction: I think China will be making their own homegrown NVidia equivalent GPUs on homegrown EUV by 2030.
- kushalpandya 6mo agoThe duopoly slowly turning into a monopoly won't be pretty.
- nickvec 6mo agoI suspect that Google is working on improving their models for coding behind the scenes. Hopefully they release something soon to compete with Codex and CC. To be candid, I use CC, but have not tried out Codex.
- strongpigeon 6mo agoI’ve tried them all and have come to slightly prefer Codex (with CC close second). Google has the benefit of being insanely profitable though.
- asim 6mo agoNothing is worth $852B in that space of time unless they are printing more than half of that in cash which to be clear they are not. They are burning it at that rate. Let's be clear. It's a valuable company, a valuable product, a valuable technology. It set the trend for the next phase of computer usage. But it's not worth $852B in that span of time and when it goes public that reality will bear down on them quickly. It's a falling knife. Don't try catch it on the way down. That valuation might be justified in another 10 years.
- kikokikokiko 6mo agoFalling knife or not, if you own an index fund, or if your 401k owns one, you're buying a piece of it at IPO prices. The exit scam is almost complete.
- nofriend 6mo agoIndex funds won't get in at ipo prices. They wait a year or so before including new stocks, so the price is guaranteed to have settled by then. OpenAI also isn't profitable yet so that's another point against them in terms of being included in index funds.
- strongpigeon 6mo agoNASDAQ just changed some rules recently concerning exactly this. https://finance.yahoo.com/news/new-rule-could-fast-track-spacex-ipo-for-nasdaq-index-inclusion-172327734.html https://finance.yahoo.com/news/new-rule-could-fast-track-spa...
- utopiah 6mo ago> justified in another 10 years. Hard to imagine when they don't have any moat. Sure they have ... I don't know how many users but it's not like a social network. Instagram was valued $10B with 10 very VERY fast not because of it's tech or employees but mostly IMHO because of the number of locked in users ... because of OTHER users. Here if one wants to move from OpenAI to Anthropic, they can and they do. You might have difficulty exporting history, context, etc but you make it. Even basic email has more lock-in than any of the model provider. They did have some moat few years ago, arguably, but now no differentiator that would justify such a valuation. They are no Meta/Google/Microsoft/Oracle not because of their size or technology but only because their customers can swap providers.
- habosa 6mo agoThere does seem to be like a 1% chance (maybe 0.5%) that this turns into a WeWork situation. It's a product that users love, but the company leadership is so used to lying and deceiving and being loose with numbers that the IPO filing could be a pretty big shock. Either they'll have to tell the truth, which will be much less rosy than the lies, or they'll lie and turn everyone off. Probably won't happen. But not definitely.