> 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.
> 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.
Launched in the same way they launch Starship, full of ambition, promising a bit too much, but might explode at any moment. Either way it will be a spectacular show regardless of what happen.
People have trouble pricing it because they do actual new engineering and don't spend time and money making the stock price wherever they want it. All the other F500s are owned by the same few companies and all the board members are the same.
Wall Street has never understood engineering. Eventually Tesla will pull a Boeing, GE, Ford, etc- lose the founder of founder's influence, get taken over by suits, and slowly die but hang on by playing the financial games.
There's definitely been a lot of "creativity" in Musk's companies. I'm honestly a bit surprised that any could go public. I thought there'd be too many skeletons in the closet, but glad things worked out/weren't that bad.
It's actually remained about 14% or more above the IPO price which is roughly what you'd want but gone up and down a bit.
It's funny with stock prices - they all go up and down a bit in kind of random ways but people project all sorts of stories onto them that often don't relate much to reality.
> 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?
The 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.
I doubt that anyone at OpenAI would let their payday decrease. If anything, they got assurances that everyone would keep the bubble going until 2028 no matter what.
What do you mean? I promise I'm not being facetious or satirical. I'm just too simple and conservative of an investor to understand this comment. (for example: Is the price-to-earnings ratio too high? I probably wouldn't want to invest in the business.)
They are losing too much money. With open source options that are always close to frontier performance it will always be hard for them reduce training costs and charge premium rates.
I 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.
Why would Sam go? He has the political power of this administration on his side. Far more than Elon, who is working hard to get it back through SpaceX military contracts. Anthropic has very little political sway, which is why they are in trouble now. OpenAI might wait to see if this government will destroy Anthropic’s chances in the USA. Then Sam could become the only player.
AI 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?
> 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.
This 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.
Data 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.
Only worse: internet infrastructure (routers, fiber, ...) depreciates over multiple decades, not mere months. What's inside those data centers matters more than them being built: today's cutting edge inference chips or GPUs may not be so useful if either hardware or models evolve in the slightest, and in some way, we should hope for that if we want to be optimistic about the future of AI/LLMs.
It'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.
I 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.
> 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.
OpenAI 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.
- 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.
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[ 4.4 ms ] story [ 50.2 ms ] threadtypo
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.
SpaceX's stock volatile? It's a shame nobody saw that coming.
is tesla stock not volatile too? elon stock's are more like today's crypto than a 20th's century company stock w dividends
Wall Street has never understood engineering. Eventually Tesla will pull a Boeing, GE, Ford, etc- lose the founder of founder's influence, get taken over by suits, and slowly die but hang on by playing the financial games.
There have been plenty of those, like SpaceX buying Solar City bonds then when they were going to go bad he used Tesla to bail them out.
Seeing something coming is very different from having it not only confirmed but also quantified.
It's funny with stock prices - they all go up and down a bit in kind of random ways but people project all sorts of stories onto them that often don't relate much to reality.
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?
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.
What do you mean? I promise I'm not being facetious or satirical. I'm just too simple and conservative of an investor to understand this comment. (for example: Is the price-to-earnings ratio too high? I probably wouldn't want to invest in the business.)
Today everyone knows there's no agi coming up and it will be a very long time until they generate any profits, if ever.
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.
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.
How do you even value a company when we don't even know if GPT-6 will be made available to the general public?
Maybe they will show major Ad revenue and Codex sales and get a higher price next year but it’s a risk.
- 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.