Is OpenAI worth $1 trillion? Potential IPO may reveal the answer.
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This feels somewhat similar to Tesla, where you're paying for the hype rather than the actual goods. So many companies generate more revenue than tesla or ChatGPT, and yet there valued so much less - I'm not sure I understand the logic of modern economics
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Can't buy it (gonna crash), can't short it (no way to know when it'll crash).
Useless stock. Public will eat it up.
Useless stock. Public will eat it up.
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Economics had long been based on the idea of Rational Markets. But we now understand that markets are not rational.
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chateauarusi
Ars Praetorian
I'm looking forward to telling my grandchildren about the bubble that ate the world.
As we roast our three-eyed squirrels over a pile of burning Alexas.
As we roast our three-eyed squirrels over a pile of burning Alexas.
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In theory, the prospectus they produce prior to the IPO should provide details as to how they make money, where their costs are, and how they plan to grow.
In practice, they will almost certainly launch via a SPAC, which enables them to replace it all with "trust me bro, line go up!"
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ColdWetDog
Ars Legatus Legionis
Yeah, that might be OK if it were matches and gasoline. Unfortunately insane kiddy has found a couple of hundred pounds of TNT and a warehouse full of napalm. I'm not so sure I want to be in the neighborhood when he figures out how to change all of that potential energy into kinetic. But my attempts to contact any friendly aliens who could get me off the planet have come to naught. I guess I'll just hide under my desk like I was taught in elementary school.
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Guess I’m waiting for AGI to be delivered by a Tesla running a release version of FSD.
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I've learned long ago that the stock market is not working on fundamentals, it's all about perception. That said I think everyone can agree anyone buying at a cap of 1 trillion is throwing away money as it's only downhill from there unless you are deep into skynet months away territory
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The operational expenses of running the bots are the primary cost center for them. They are renting huge amounts of servers from Microsoft.
The servers are very expensive, with high end AI cards costing tens of thousands of dollars with multiple cards in a single 1U server. This means that a single rack probably could easily cost 3 or 4 million in hardware (or more depending on how dense your cooling and power can support). They also have tremendous power and cooling requirements. Existing data centers have had to make significant power and cooling upgrades to handle these racks.
AI is single-handedly driving up a huge increase in electricity usage in the US, which has not had a growth in electricity usage in a couple of decades. That is how big the electrical draw of these things are.
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It's downhill unless they can significantly reduce energy and computational expenses. People use it now at its current costs, but they probably wouldn't at its actual costs.
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The more coverage the worse it gets.
Circular payments, anyone?
View: https://www.youtube.com/watch?v=h3JfOxx6Hh4
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IPO chatter? We must be approaching the peak of inflated expectations on the Gartner Hype Cycle.
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That may be true, but he does have a synthetic, talking girlfriend who will drive him to suicide. So there'e that.
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Once OpenAI goes public, index funds and ETFs that track tech indices or AI-focused sectors will be forced to buy OpenAI stock if it’s included, even if it’s overvalued. That’s automatic demand, regardless of fundamentals. Pension funds fiduciaries are often required to match benchmarks or maintain allocations to tech sectors. If OpenAI becomes part of a major index, pensions will have no choice but to buy. Mutual Funds, same story. Active managers can justify holding shares under "strategic exposure to transformative technology," regardless of actual earnings.
In other words, the structure guarantees a built-in buying pressure at IPO, feeding the initial valuation spike. This is textbook "liquidity extraction" from public capital. It's gross. I pray regulators which still have some independence(Canada, UK, EU) will flag the insanity of this derailment of reality. I fear the Trump SEC won't likely do fuck. The Gold Rush is on, grift while the griftin' is good.
In other words, the structure guarantees a built-in buying pressure at IPO, feeding the initial valuation spike. This is textbook "liquidity extraction" from public capital. It's gross. I pray regulators which still have some independence(Canada, UK, EU) will flag the insanity of this derailment of reality. I fear the Trump SEC won't likely do fuck. The Gold Rush is on, grift while the griftin' is good.
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No, this is not like Tesla. The Tesla that IPO'd was an electric vehicle manufacturer—before the Model S was released, before Autopilot, before Powerwall and Powerpack. The market's assessment of Tesla at IPO was based on Roadster and its plans to launch Model S: physical, tangible products with a measurable COGS and relatively clear paths to positive margin.
OpenAI will likely never IPO, and if it does the post-launch window will be an absolute fire sale. The S-1 filings alone will be disastrous for the company, and the fact that Altman is floating this nonsense with their current fixed costs and unit economics says they have no actual plans for profitability.
OpenAI will likely never IPO, and if it does the post-launch window will be an absolute fire sale. The S-1 filings alone will be disastrous for the company, and the fact that Altman is floating this nonsense with their current fixed costs and unit economics says they have no actual plans for profitability.
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I find this so sad but also a perfect encapsulation of humanity. "We" will literally spend trillions it seems on something that most likely won't give that much benefit or return instead of spending trillions on infrastructure and adapting our societies to our rapidly shifting climate. Something that actually will benefit society and all living in it, including financial investors since I would think that society staying somewhat intact should be beneficial. It's just demoralizing but also serves us right.
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Yes. Altman's entire plan appears to be, "Become Too Big to [be allowed to] Fail." Unfortunately for him, a tightening global economy and recession worries should spook public markets, and the growing chorus of "Bubble" means it just might be time for a juicy collapse story.
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Quarterly losses of $11.5B against an annual revenue of $20B makes for irrational cope now I guess.
But you do you, I think the rest of us are all aware of your view on things.
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Maybe Tesla stock will crater just before/after OpenAI's IPO, lots of people selling TSLA to buy OpenAI? After all, this kind of irrational "investment" money is finite.
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Letting the oceans boil isn't the part they struggle with. They'd happily let it boil if they could get a viable product out of it. As it stands they're boiling it at a loss
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Hopefully you are using the long scale here like more of the world and Europe, where 10 trillion means around 10 quintillion $USD in the US short scale? That's talking exadollars, or 1018...
Now THAT would make for quite the market crash. One that would definitely bring down the whole capitalist system. Although I am not really sure I would like such a nuclear solution.
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Do you stick your face into a dumpster fire to estimate the amount of trash still left to burn as to "make a bet" when it will burn itself out - or if there is some kind of explosive there ready to go off?
Me neither. All of this is so crazy and irrational to me that I do not want to risk even betting on it. And I buy friggin lottery tickets regularly...
Edit: typo
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Or it crashes like WeWork when people realise just how bad the books are.
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Apparently you also have to be profitable to be included in the S&P500. https://www.investopedia.com/articles/investing/090414/sp-500-index-you-need-know.asp
So I'm not going to lose any money on this.
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All it takes is finding investors so into the hype that they don't read the legally required disclosures. Or maybe there will be major hallucinations in those disclosures.
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OpenAI needs $400 Billion In The Next 12 Months? I guess Altman is betting on an IPO to raise the money for that. But:
I doubt there's enough time to IPO by then. Not to mention, the 100s of GW of datacenters will take a command-economy, wartime, damn-the-torpedos-type effort to even bring online sometime before 2030.
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This will be probably end up like nearly all the SPACs in 2020-2022. The insiders doing the merger will hype it up like mad, make out like bandits, the true believers who buy on IPO or SPAC day will get absolutely destroyed.
And then A16Z et al will use that cash from selling to chumps to fund whatever their next pump and dump is. Humanoid robots or quantum computers seems likely.
It'll be really interesting if they do a road show, as all the AI companies with their seemingly-broken business models are still private. Having the biggest one have to be legally honest about their losses and where they come from will give data that the public hasn't really seen.
And then A16Z et al will use that cash from selling to chumps to fund whatever their next pump and dump is. Humanoid robots or quantum computers seems likely.
It'll be really interesting if they do a road show, as all the AI companies with their seemingly-broken business models are still private. Having the biggest one have to be legally honest about their losses and where they come from will give data that the public hasn't really seen.
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I don’t trust anything Altman says. This could well just be some more bullshit spewed to increase openAI’s ability to fundraise from VC investors.
However, if the IPO really does happen I hope it goes as well as WeWork’s IPO did.
However, if the IPO really does happen I hope it goes as well as WeWork’s IPO did.
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The robot is not willing to do anything. It is not capable of will. It's a very fancy, very expensive token prediction algorithm.
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We have got to stop letting scumbag techbros get away with ruining the economy with their obvious lies and useless planet killing tech.
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