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OpenAI leans toward waiting until next year for IPO
- babelfish 4mo ago> up from the company’s last private valuation of $730 million typo
- 4k0hz 4mo agoFor now.. ;)
- therobots927 4mo ago[flagged]
- simianwords 4mo ago... you think this is vindicating Ed Zitron? The dude is on a spree claiming the bubble will burst any time soon [1]. In fact Ed Zitron predicted that OpenAI will IPO sooner and not later [2]! This whole post is yet again another thing that he got wrong. [1] https://www.youtube.com/results?search_query=ed+zitron+bubble https://www.youtube.com/results?search_query=ed+zitron+bubbl... [2] https://www.wheresyoured.at/openai-cfo-news https://www.wheresyoured.at/openai-cfo-news > It's clear that both OpenAI and Anthropic are rushing toward a public offering so that their CEOs can cash out, and that their underlying economics are equal parts problematic and worrying.
- therobots927 4mo agoOAI canceling an IPO this year a week after he released their dogshit financials is not a coincidence and yes it does vindicate him. He’s not shorting the market or calling a top. He’s saying that the bubble will pop because the underlying business model is and always will have a NEGATIVE ROI. Unless you’re speculating on semiconductor stocks the difference is irrelevant. Do me a favor and tell me how much of the 1,000,000,000,000 spent / committed to a datacenter buildout has been returned to shareholders / creditors?
- simianwords 4mo ago1. they didn't cancel their IPO and they were deliberate about having the option to time their IPO 2. he has tried over and over again to predict the bubble and peak [1] [2] [3] 3. that OpenAI is filing for an IPO next year is no vindication of Ed's claim when he specifically predicted the opposite (as I showed in the above comment) 4. OpenAI filing for an IPO next year has no bearing on its fundamentals 5. on Datacenters: Anthropic had to lease it from Elon's datacenter because they were too short on capacity and every one was complaining that their limits were too low [1] Ed on 2024, "threaten to begin a collapse that I’ve been predicting since March" https://www.wheresyoured.at/burst-damage/ https://www.wheresyoured.at/burst-damage/ [2] Ed on 2024, "three quarters to prove itself before the apocalypse comes" https://www.wheresyoured.at/peakai/ https://www.wheresyoured.at/peakai/ [3] Ed on 2024, "things are beginning to collapse" https://www.wheresyoured.at/subprimeai/ https://www.wheresyoured.at/subprimeai/ Edit: the quality of discussion in this website is annoying sometimes.get downvoted for good faith discussion
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- JumpCrisscross 4mo ago> Edit: the quality of discussion in this website is annoying sometimes.get downvoted for good faith discussion Ignore it and don't do this: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- JumpCrisscross 4mo ago> OAI canceling an IPO this year a week after he released their dogshit financials There is zero evidence of any causal link between him and this. The obvious one, instead, is SpaceX's volatility. > Do me a favor and tell me how much of the 1,000,000,000,000 spent / committed to a datacenter buildout has been returned to shareholders / investors? If Anthropic also delays its IPO, you'll have a point.
- jrflowers 4mo agoI like that people will post stuff like “Ed Zitron is always wrong! Look at this wrong claim he made!” and then link to him not making that claim at all. “Rushing toward a public offering so that their CEOs can cash out” is not a prediction of a specific time to IPO, and is supported by OpenAI’s own public statement two months after that was published https://openai.com/index/openai-submits-confidential-s-1/ https://openai.com/index/openai-submits-confidential-s-1/
- simianwords 4mo agoI don't even know what you are trying to say, I opened your link > We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best. So... OpenAI has specifically said that they have not decided on the timing and it may be a while. And now we have news that they are waiting till next year. What do you think is supported by whom? Being more clear and concrete helps the discussion.
- jrflowers 4mo ago>it may be a while Or sooner. It says sooner or later. It only means “later” if you don’t read the “sooner” part. Choosing to read selectively isn’t One Weird Trick To Own A Blogger. “This post about submitting a draft S1 to the SEC is proof that they don’t want to go public” lmao
- lovich 4mo ago> Choosing to read selectively isn’t One Weird Trick To Own A Blogger. I mean it’s pretty obvious that the pro AI as an industry wide replacement people think it is One Weird Trick. I’ve still yet to see any of them articulate how they are going to reach profitability without resorting to the meme of projecting that their baby has doubled size in 6 months so is projected to reach 10.5 trillion pounds by the age of 10.
- CodingJeebus 4mo agoOpenAI did confidentially file their S-1, which costs a ton of money to put together for the bankers and regulators to review. They did test the market and it looks like either the banks or people directly around Altman told him not to move forward. That doesn't mean Zitron was wrong about OpenAI IPOing. They took steps in that direction and then decided not to move forward. That's not his fault. As far as the bubble bursting soon, we are starting to see some pretty concerning signals. The South Korean stock market triggered trading circuit breakers twice earlier this week to stop a runaway selloff in the tech sector. For reference, circuit breakers have only been triggered in the Korean market 10 times in history, and only 5 times ever in the US markets. https://finance.yahoo.com/markets/world-indices/articles/kospi-falls-8-triggers-circuit-061212686.html https://finance.yahoo.com/markets/world-indices/articles/kos...
- dofm 4mo agoFWIW I think there's a "Y2K never happened" future here, where the bubble never bursts (in the sense of some insane market valuation proving to be lunatic) but everyone does what they can to make sure it doesn't burst on them, and they pull back and the bubble just deflates. Take for example the action on SPACs that made the "SPAC everything" era end.
- edoceo 4mo agoI'm also feeling like that, not a quick burst like dot-com but a deflating bubble over next 24 months. During which AI costs rise and IPO valuation comes down. Maybe my memory of dot-com is fuzzy (likely) and perhaps I didn't see early warning (or even didn't know how to see it). I feel like it all transpired over 3 months. And for those of us in Seattle the "death-knell" was the Nisqually quake that made much of Pioneer Square unsafe to occupy for a while.
- dofm 4mo agoOne of the things that really strikes me is that there are so many people talking about how great the frontier models are but there's nowhere near as many people talking about open weights and local models. There is this huge knowledge gap here about what the local models could do in terms of consumer queries with a tiny bit of agentic support. If more people could tinker with local models and see what they can do, I think there would be far less belief that only the big two/three hold the keys to the kingdom and far more that the future is a bit more distributed. On that basis I am always on the lookout for coverage that gets into this — Cal Newport touches on it a bit — because I think it is one of the deflationary factors, as is the quality of open weights models, which in turn is why Anthropic is now getting credulous journalists to write about "distillation attacks". Re: the dot-com crash, I was in the UK working for an internet startup at the time though I was on a sort of health break/sabbatical at the time of the pets.com crash, so I was reading and researching, and while I do remember the coverage of their valuation being insane, and agreeing with that, I also think it did not have such a long run-up. We did know in 1998 and 1999 that Broadvision's valuation seemed absolutely insane, for example, and that some e-commerce developer and design startups were radically overvalued, but what is so different about this time is how much more broadly things were distributed then. So many players. Even the major duality (which was Microsoft vs ABM — a loose coalition of "Anyone But Microsoft") had many more players. Whereas now… it feels like a prequel to Rollerball.
- hnarn 4mo ago> It’s a small compensation for the immense damage you’ve all done to the industry and more importantly the economy For all of those on HN that think venture capital is just numbers in a spreadsheet, consider that every dollar spent on AI is one that was not spent investing in the ”normal” economy. If this gamble does not play out, there will be bills to pay for all of society. As stated in Chernobyl: ”Every lie we tell incurs debt to the truth”, except in this case ”the truth” is the (un-)employment status of your friends, relatives and neighbors.
- cdrnsf 4mo ago> The A.I. company’s advisers are pushing its chief executive, Sam Altman, to move slowly after SpaceX’s stock has been volatile and as the start-up grapples with financial challenges. SpaceX's stock volatile? It's a shame nobody saw that coming.
- echelon 4mo agoIs it still being prematurely included in the major index funds?
- winfredJa 4mo agoyes, in few weeks.unfortunately the stock will be back from this slump
- androiddrew 4mo agoUmmm probably not. Lock ups are going to dump far more stock into the market.
- kurthr 4mo agoBut they are going to coincide lockups with the release of additional stock float from 5% up to 20% of the total "valuation" with a 3x QQQ multiplier so that stock indexes will treat them as 60% float even though 2/3rds of those shares are unavailable. Thus they guarantee that even more shares must be bought by tracking ETFs and institutional buyers. Everybody (that already owns pre-IPO shares) wins!
- kirubakaran 4mo agoBut that's not a secret, and therefore already priced in, right?
- JumpCrisscross 4mo ago
- dminik 4mo ago> The A.I. company’s advisers are pushing its chief executive, Sam Altman, to move slowly after SpaceX’s stock has been volatile and as the start-up grapples with financial challenges. Surely if your company isn't just blowing smoke then you have nothing to worry about. Or is this an admission that the insane valuation for these companies is currently just bullshit?
- JumpCrisscross 4mo ago> if your company isn't just blowing smoke then you have nothing to worry about Not really. Plenty of solid companies have to wring their hands around IPO timing based on market conditions. Sometimes, this is due to valuation multiples. Sometimes it's due to fads, e.g. investors preferring capital-structure efficiency versus low leverage.
- dminik 4mo agoI mean, my comment wasn't necessarily meant to be some insightful analysis. But I do find it weird that OpenAI has seemingly gone from racing Anthropic to "maybe in 6 months" in the span of a week.
- JumpCrisscross 4mo ago> OpenAI has seemingly gone from racing Anthropic to "maybe in 6 months" in the span of a week When was the last time someone seriously asked if OpenAI was going to go public before Anthropic? For me, it's been at least months, maybe closer to a year. The corporate-governance complexity drove half of that, momentum the other half, and messaging from both companies having been consistent with that timeline for months sealed the deal.
- dminik 4mo agoI mean, they did the "confidential S1 filing" thing a few days apart. Anthropic on 1st June: https://www.anthropic.com/news/confidential-draft-s1-sec https://www.anthropic.com/news/confidential-draft-s1-sec OpenAI shortly before June 8: https://openai.com/index/openai-submits-confidential-s-1/ https://openai.com/index/openai-submits-confidential-s-1/ That was less than a month ago. They seemed to be on a similar pace at least from my point of view.
- koolala 4mo agoMaybe they want a Mythos level model first.
- wmf 4mo agoGood news: GPT-5.6 has been export restricted.
- koolala 4mo agoWhere are the anecdotes about it hacking the NSA though?
- wmf 4mo agoIt's not even out yet. Give it a second.
- koolala 4mo agoThey need to do something new like create a more efficient battery formula out of recyclable abundant components. Hydrogen + Oxygen and Water are a good abundant recyclable example but also so is Gravity. Nightly / seasonal / long term energy storage needs another compact and efficient solution as elegant as these but better. (saying superconductors is cheating)
- tristanj 4mo agoThis is patently false, don't spread rumors. Voluntarily delaying release at the request of the government is not the same as imposing export controls.
- itemize123 4mo agoI would categorize the op as "technically false" but if they don't voluntarily delay, they would be export controlled.
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- cmiles8 4mo agoThe window has basically closed for them for the time being. The business math just isn’t there. The best option at this point is kick the can down the road and hope market sentiment improves next year. Not much signal that it will, and quite a lot of signal the sentiment only declines, but pumping the brakes is the least worst option on the table.
- JumpCrisscross 4mo ago> window has basically closed for them for the time being. The business math just isn’t there Unless Anthropic also cancels its IPO, this probably isn't it.
- cmiles8 4mo agoThe math doesn’t help Anthropic either but the market views these two companies very differently at the moment. Anthropic is seen as having momentum. Open AI is seen as having likely peaked. That makes a huge difference when pitching an IPO.
- wiiww 4mo agoAgree but Anthropic momentum is fading too. Open source is starting to slowly become a source of frustration for frontier labs In the discussion around value for money.
- reilly3000 4mo agoHow is momentum fading when their headline product is so good it’s illegal?
- sharadov 4mo agoI was really hoping that they Ipoed this year, so we can see their stock shoot up and down in flames, and we're really done with them and Sam Altman, once and for all.
- fragmede 4mo agoWhile spcx has room to go up or down from where it is today, the reality is it that didn't drop like a rock on IPO day, so wall street bets vibes-based online "analysis" investing is only good for paper money.
- outside1234 4mo agoThe investment bankers were in there manipulating, but that's over, and gravity is here.
- derwiki 4mo agoIt is funny to mention “gravity” in reference to company that makes rockets that escape gravity
- ambicapter 4mo agoIt might even elicit a mild chuckle when you realize nothing "escapes" gravity. You might be thinking of escape velocity?
- derwiki 4mo agoYup, fair enough!
- dgellow 4mo agoAfter the IPO Altman will be even more insanely rich, and that time in a more liquid manner. I don’t think he will go away
- michelb 4mo ago
- int32_64 4mo agoAI exits in America probably have a political cliff approaching fast as populist backlash will hit them, or perhaps they see political winds favorable to regulatory capture in the future and are waiting for that?
- JumpCrisscross 4mo ago> AI exits in America probably have a political cliff approaching fast as populist backlash will hit them The populist backlash is coming for datacenters. I'm unconvinced that's truly problematic to these companies given data travels close to the speed of light and plenty of countries have energy, data interconnects and governments unresponsive to locals' concerns.
- kridsdale1 4mo agoThis morning I heard a convincing argument that the data center backlash is only really significant in the USA because jobs here equal health care access. Europeans can afford to be less threatened existentially.
- strangattractor 4mo agoData centers are the next Dark Fiber from 2000. After VCs and private Equity fund them there will not be sufficient demand because AI will inevitably not entirely live up to all the hype. The fire sale will eventually begin. Then Google, M$, Apple and Amazon will buy them at a discount just like Google snatched up the dark fiber after 2000.
- nicechianti 4mo ago[dead]
- sourcegrift 4mo agoIt's over. Open models and chinese models will make fast progress and that nvidia+ms 128gb monster is what everyone will end up buying. sama can go back to running scams.
- outside1234 4mo agoOpenAI is in deep trouble is what I am reading into this
- luisgvv 4mo agoWhy?
- combilabs 4mo agoI actually see this as an indicator that they still feel they can comfortably raise in the private market. If they tried to rush an IPO into an indifferent public market it would look worse, in my opinion. I'm not saying they're in great shape--they may be in terrible shape for all I know. But I think rushing the IPO would send a worse message than holding off.
- albatross79 4mo agoBad idea, the AI hype train still has some gas, when it settles in that it's just another tool it's all going to fizzle out.
- therobots927 4mo agoI can’t wait. It’s gonna be an absolute blast to watch.
- tempodox 4mo agoThey just want to see Anthropic crash first and then be the last survivor.
- flowerthoughts 4mo agoIf Anthropic tanks in the public markets, that will cause a revaluation of OpenAI in the private markets. If they delay IPO to try another private round, they also want to sign that round early. Perhaps that's Anthropic's plan, is they believe OpenAI is weak. If the IPO is good they win. If it's bad OpenAI loses.
- bob1029 4mo agohttps://en.wikipedia.org/wiki/First-mover_advantage#Second-mover_advantage https://en.wikipedia.org/wiki/First-mover_advantage#Second-m...
- lelanthran 4mo ago> They just want to see Anthropic crash first and then be the last survivor. I don't think so. There's only two real options here: 1. There's no bubble to pop 2. There's a bubble to pop In the first case, the first AI company to IPO gets a ton of money from the market who wants to get in on this, and the second to IPO finds that there's not enough capital left in the public markets and has to sell for less than they'd wanted to. In the second case, the fir5st to IPO gets money from their shares, which drop in value (bubble popping), adn the second to IPO gets absolutely nothing (bubble popped). In both cases, the first to IPO gets the rewards, the second gets either less or nothing.
- draginol 4mo agoWith all the uncertainty about AI regulation, I don't think now is the time. How do you even value a company when we don't even know if GPT-6 will be made available to the general public?
- hnarn 4mo agoI’m not so sure the uncertainty around _regulation_ is the concern here.
- MichaelDickens 4mo agoOpenAI and Anthropic valuations are based on the premise that they may develop AGI in the near future. How do you value a company based on that premise? Throwing regulations into the mix doesn't make the problem much harder than it already is.
- fsuts 4mo ago“A bird in the hand is worth two in the bush” as the saying goes. Maybe they will show major Ad revenue and Codex sales and get a higher price next year but it’s a risk.
- Havoc 4mo agoThey realised their numbers are much worse than anthropics
- therobots927 4mo agoYou know anthropics numbers? They still haven’t filed either.
- Havoc 4mo agoThey said they’re profitable on operating profit. Think it’s pretty safe to assume theirs are less of a dumpster fire
- therobots927 4mo agoWell that’s great to hear that they are saying a non-GAAP profit metric is greater than zero. I agree it’s less of a dumpster fire than OAI but that’s not a very hard bar to clear.
- Havoc 4mo agoTrillion dollar dumpster fires are currently in fashion GAAP or not
- therobots927 4mo agoCurrently in fashion isn’t exactly a confidence booster heading into multiple rate hikes and a pressure on hyperscalers to cut capex.
- light_triad 4mo agoPart of the issue is the respective positioning: - OpenAI wants to be the consumer version of AI, modeled after Google and Meta, with a mostly free universal service powered by ads and e-commerce. They haven't fully shown that model can work. The big problem is the lack of zero marginal costs as each new user requires GPU spend. - Anthropic positions itself more as enterprise AI, modeled after Microsoft ironically enough, and charges big companies for services. The economics of coding agents work but GPUs get expensive fast and open models are getting good enough for most use cases. So it's a race between ads and e-commerce offsetting AI spend and open source eating almost everyone's lunch.
- aurareturn 4mo agoEven open source models need hardware and energy to inference. Therefore, anyone offering a free ChatGPT competitor will be using the same unit economics. My bet is that OpenAI will make free ChatGPT work through ads.
- pastamania 4mo agoIt's a very open question whether the economics for ads work though. Ads aren't just an infinite money pit you can just reach into, they have a price ceiling you have to stay under before they stop making sense for the advertiser. And if some of the rumours about OpenAI's ad CPMs are true, the inventory is going to be massively expensive. It makes sense for it to be expensive, mind. The unit cost of serving an LLM response is so much higher than the unit cost of serving a bunch of Instagram posts, or traditional search results or whatever. But price too highly, most advertisers won't be able to justify them. Why spend $60 for what you can buy from Meta for $6? It's a brave media buyer who runs with that as a long term strategy. But if you don't price highly, you're just offsetting some of the losses. The whole reason Google, Meta et all's ad networks exploded what because they cost less to get reach than traditional media did before, which opened them up to a bazillion small businesses who otherwise didn't have the capital to get off the ground through traditional media. ChatGPT's will cost more than what's available now. Massively more. There's not a lot of history of that working out! They'll get some buyers for a little while, the $60 vs $6 equation balances out if the ads are 10x more effective, and companies will throw a bit of money into campaigns to get a feel for how well they perform. (Google is in a different position, they make basically near infinite margin on other ad types and can lump budgets in together to get still-attractive blended CPMs. It's a hit, but it's worth taking to protect their wider network, just like they did for years when Youtube wasn't remotely profitable.)