4 ms·

Looks like there is only limited money in the market and there is a race to get it first. Wonder if the free market concept should move the prices down in such

Looks like there is only limited money in the market and there is a race to get it first. Wonder if the free market concept should move the prices down in such a scenario?

nradov 5mo ago
Don't worry, the Fed can create infinite money!
- miohtama 5mo ago
  It's good that there is now a new head of Fed for this.
aurareturn 5mo ago
I think it's because the private market can't possibly go any higher. OpenAI is already valued at around $1 trillion and just raised $122b. The only next step is the public market.
- epolanski 5mo ago
  Meanwhile Chinese AI companies outputting open weight models nearly as good are valued in the low single digit billions. Go figure.
  - subarctic 5mo ago
    Wasn't there a Chinese ai startup that got bought recently but the government wouldn't let the founders leave china? I think stuff like that would have an effect on valuation
    - disgruntledphd2 5mo ago
      Yeah, Manus were supposed to be acquired by FB, but the Chinese government nixed it.
      - Danox 5mo ago
        long-term a very smart move to block it.
  - lelanthran 5mo ago
    > Meanwhile Chinese AI companies outputting open weight models nearly as good are valued in the low single digit billions. That's surprising to me; I thought (or heard) that it was low 3-digit millions.
  - pjc50 5mo ago
    That's the premium for being a Western company in a Western market, yes.
  - Spooky23 5mo ago
    They are dirty communists. We prefer red blooded American scam artists here, buddy. Hell, Elon probably found some bullshit way to recognize Chinese AI as Twitter revenue, used to buy cyberattacks to sell to SpaceX.
    - HWR_14 5mo ago
      I believe that Elon is in fact selling inference data center time under SpaceX (which does own Twitter), some of which may be used to buy cybertrucks.
  - svantana 5mo ago
    Current chinese AI company valuations (USD): Knowledge Atlas Technology (Z.ai): 57B MiniMax Group: 26B Deepseek: 45B (rumored)
- 0xDEAFBEAD 5mo ago
  >the private market can't possibly go any higher Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble: https://www.multpl.com/shiller-pe https://www.multpl.com/shiller-pe This is already close to being the frothiest market in US history. Consider two competing forecasts for AI: it's a "normal technology", or it will be superintelligent. If it's a "normal technology", where's the moat? Why won't this turn into a boring commodity business, like telecom after the bubble? Sure, railroads transformed the US, but that didn't prevent investors from losing a bunch of money first: https://news.ycombinator.com/item?id=47900502 https://news.ycombinator.com/item?id=47900502 If it's superintelligence, we're most likely either all dead (in which case you helped cause human extinction by investing, congratulations) or else we're living on generous UBI: https://www.astralcodexten.com/p/you-have-only-x-years-to-escape-permanent https://www.astralcodexten.com/p/you-have-only-x-years-to-es...
  - staticman2 5mo ago
    > Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble: Shiller PE is near 44. Japan had an equivalent price to earnings ratio of over 70 during their 1989 bubble.
    - 0xDEAFBEAD 5mo ago
      Hm, wasn't Japan's bubble in part due to easy credit? Are we going to see easy credit in the US given recent memories of inflation?
      - pjc50 5mo ago
        Quite possible that there will be a Trump effort to drive down rates and abandon inflation control for political reasons.
        staticman2 5mo ago
        There already was such an effort but Trump lacks enough federal reserve votes to succeed at present.
- nicce 5mo ago
  > I think it's because the private market can't possibly go any higher. OpenAI is already valued at around $1 trillion and just raised $122b. How many public companies even get 122b? They definitely can go higher if they really are that valuable. With public companies come the other factors which might not be based on the actual value and can cause people to throw money.
furyg3 5mo ago
This is also my understanding of why Twitter (and thus Grok) was acquired by SpaceX (which was already having an IPO). Less to do with GPUs in space, more to do with the first way to invest 'directly in AI companies without a proxy (e.g. nvidia).
utopiah 5mo ago
> free market concept should move the prices down Kind of a radical idea. I did read about that in economy books way back when at uni... but I don't think it's really happening actual. At least my walled doesn't seem to get it. PS: it's a joke, free market works when there is competition. VCs are making damn sure it's just enough monopolies that they get wealthier while consumers themselves get milked. Without antitrust actually being enforced, there is no free market.
- skybrian 5mo ago
  Prices do go down for electronics: https://ourworldindata.org/grapher/price-changes-consumer-goods-services-united-states https://ourworldindata.org/grapher/price-changes-consumer-go...
  - zozbot234 5mo ago
    That was then and this is now. RAM and storage prices are through the roof, effectively erasing the price drops of the latest 15 years or so.
    - skybrian 5mo ago
      Seems like a Macbook Neo would be far better than a computer at any price from 15 years ago? What would it have taken to build an equivalent computer?
scrollop 5mo ago
Since it appears that LLMs can't achieve AGI and lose hallucinations, I presume a new company will appear with a new architecture that can - what happens to the current behemoths and their stock prices? Will they jump architectures? Splendidly interesting times.
killerstorm 5mo ago
That's not how money works. It's not an asset which is subject to conservation of matter like gold. Banks make money by giving out loans is a meme, but it's actually true here. You kind of need collateral to do that, but a stock of a company which has revenue is a perfectly cromulent collateral even by strict standards. It's not even some infinite money glitch - it's kinda how the whole system is supposed to work. The stock market is largely about betting on expectations of future value while money is just a token which is used to settle things. E.g. if you think about simplified mechanics of IPO, say, investor Alice buys OpenAI shares, OpenAI gets the money and Alice has shares. If for simplicity we assume that Alice and OpenAI use same bank and there are no intermediaries, then it literally just updates two cells in a database. And Alice now has shares which is an asset of known value, thus can be borrowed against, etc. Also, say, OpenAI can use that money to repay debt, then perhaps lender would buy SpaceX stocks - it's not like money was withdrawn from the system. Of course, there can be some interference: multiple companies do IPO around same time it would reduce FOMO, and if they did it literally in one day there might be lack of liquidity.
- marcosdumay 5mo ago
  There are regulations that mostly forbid stock movements from creating new money. The money available for an IPO is pretty much finite and independent of those companies' actions.

Looks like there is only limited money in the market and there is a race to get it first. Wonder if the free market concept should move the prices down in such a scenario?

nradov 5mo ago

Don't worry, the Fed can create infinite money!

miohtama 5mo ago
It's good that there is now a new head of Fed for this.

aurareturn 5mo ago

I think it's because the private market can't possibly go any higher. OpenAI is already valued at around $1 trillion and just raised $122b. The only next step is the public market.

epolanski 5mo ago
Meanwhile Chinese AI companies outputting open weight models nearly as good are valued in the low single digit billions. Go figure.
- subarctic 5mo ago
  Wasn't there a Chinese ai startup that got bought recently but the government wouldn't let the founders leave china? I think stuff like that would have an effect on valuation
  - disgruntledphd2 5mo ago
    Yeah, Manus were supposed to be acquired by FB, but the Chinese government nixed it.
    - Danox 5mo ago
      long-term a very smart move to block it.
- lelanthran 5mo ago
  > Meanwhile Chinese AI companies outputting open weight models nearly as good are valued in the low single digit billions. That's surprising to me; I thought (or heard) that it was low 3-digit millions.
- pjc50 5mo ago
  That's the premium for being a Western company in a Western market, yes.
- Spooky23 5mo ago
  They are dirty communists. We prefer red blooded American scam artists here, buddy. Hell, Elon probably found some bullshit way to recognize Chinese AI as Twitter revenue, used to buy cyberattacks to sell to SpaceX.
  - HWR_14 5mo ago
    I believe that Elon is in fact selling inference data center time under SpaceX (which does own Twitter), some of which may be used to buy cybertrucks.
- svantana 5mo ago
  Current chinese AI company valuations (USD): Knowledge Atlas Technology (Z.ai): 57B MiniMax Group: 26B Deepseek: 45B (rumored)
0xDEAFBEAD 5mo ago
>the private market can't possibly go any higher Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble: https://www.multpl.com/shiller-pe https://www.multpl.com/shiller-pe This is already close to being the frothiest market in US history. Consider two competing forecasts for AI: it's a "normal technology", or it will be superintelligent. If it's a "normal technology", where's the moat? Why won't this turn into a boring commodity business, like telecom after the bubble? Sure, railroads transformed the US, but that didn't prevent investors from losing a bunch of money first: https://news.ycombinator.com/item?id=47900502 https://news.ycombinator.com/item?id=47900502 If it's superintelligence, we're most likely either all dead (in which case you helped cause human extinction by investing, congratulations) or else we're living on generous UBI: https://www.astralcodexten.com/p/you-have-only-x-years-to-escape-permanent https://www.astralcodexten.com/p/you-have-only-x-years-to-es...
- staticman2 5mo ago
  > Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble: Shiller PE is near 44. Japan had an equivalent price to earnings ratio of over 70 during their 1989 bubble.
  - 0xDEAFBEAD 5mo ago
    Hm, wasn't Japan's bubble in part due to easy credit? Are we going to see easy credit in the US given recent memories of inflation?
    - pjc50 5mo ago
      Quite possible that there will be a Trump effort to drive down rates and abandon inflation control for political reasons.
      - staticman2 5mo ago
        There already was such an effort but Trump lacks enough federal reserve votes to succeed at present.
nicce 5mo ago
> I think it's because the private market can't possibly go any higher. OpenAI is already valued at around $1 trillion and just raised $122b. How many public companies even get 122b? They definitely can go higher if they really are that valuable. With public companies come the other factors which might not be based on the actual value and can cause people to throw money.

furyg3 5mo ago

This is also my understanding of why Twitter (and thus Grok) was acquired by SpaceX (which was already having an IPO). Less to do with GPUs in space, more to do with the first way to invest 'directly in AI companies without a proxy (e.g. nvidia).

utopiah 5mo ago

> free market concept should move the prices down Kind of a radical idea. I did read about that in economy books way back when at uni... but I don't think it's really happening actual. At least my walled doesn't seem to get it. PS: it's a joke, free market works when there is competition. VCs are making damn sure it's just enough monopolies that they get wealthier while consumers themselves get milked. Without antitrust actually being enforced, there is no free market.

skybrian 5mo ago
Prices do go down for electronics: https://ourworldindata.org/grapher/price-changes-consumer-goods-services-united-states https://ourworldindata.org/grapher/price-changes-consumer-go...
- zozbot234 5mo ago
  That was then and this is now. RAM and storage prices are through the roof, effectively erasing the price drops of the latest 15 years or so.
  - skybrian 5mo ago
    Seems like a Macbook Neo would be far better than a computer at any price from 15 years ago? What would it have taken to build an equivalent computer?

scrollop 5mo ago

Since it appears that LLMs can't achieve AGI and lose hallucinations, I presume a new company will appear with a new architecture that can - what happens to the current behemoths and their stock prices? Will they jump architectures? Splendidly interesting times.

killerstorm 5mo ago

That's not how money works. It's not an asset which is subject to conservation of matter like gold. Banks make money by giving out loans is a meme, but it's actually true here. You kind of need collateral to do that, but a stock of a company which has revenue is a perfectly cromulent collateral even by strict standards. It's not even some infinite money glitch - it's kinda how the whole system is supposed to work. The stock market is largely about betting on expectations of future value while money is just a token which is used to settle things. E.g. if you think about simplified mechanics of IPO, say, investor Alice buys OpenAI shares, OpenAI gets the money and Alice has shares. If for simplicity we assume that Alice and OpenAI use same bank and there are no intermediaries, then it literally just updates two cells in a database. And Alice now has shares which is an asset of known value, thus can be borrowed against, etc. Also, say, OpenAI can use that money to repay debt, then perhaps lender would buy SpaceX stocks - it's not like money was withdrawn from the system. Of course, there can be some interference: multiple companies do IPO around same time it would reduce FOMO, and if they did it literally in one day there might be lack of liquidity.

marcosdumay 5mo ago
There are regulations that mostly forbid stock movements from creating new money. The money available for an IPO is pretty much finite and independent of those companies' actions.