I am very curios if OpenAI's IPO attempt this year will turn into WeWork 2.0 where all the air suddenly comes out of the valuation once the market acknowledges that they have no moat and lack a clear path to profitability that would make these huge investments worthwhile.
There’s a reason OpenAI and Anthropic are both trying to accelerate their IPO while still being wildly unprofitable. There is still unlimited AI hype in the market. If they go public this year the entire world is going to blindly buy them without looking at their books.
It depends where I look. Among colleagues and tech-native friends, I feel like there’s healthy skepticism as well as the excitement about new tech. On the other hand, all the investment podcasts that I’ve been following for years are nothing but ignorant AI hype and reciting articles about how all the jobs are about to disappear. I guess the people who doesn’t make firsthand experiences are not leaving the hype yet.
Both groups will operate on a wide spectrum, but if we're already generalizing...
Perhaps there's a matter of competing priorities?
Programmers are usually quite cynical overall, but in this case I see it as a "My CEO is telling me _out loud_ that they want to replace me, so why would I help them speed up that process?"
Investors likely want what they're invested in to appreciate, so I imagine they're likely over-leveraged and are doing what they can to get their bag.
> sky-high expectations of AI have come down quite a lot.
they hype for AGI has certainly deflated, i haven't heard anything about that being right around the corner and the implications in a while now. The hype and doom now seems to be coming from software devs only, the front page news articles about AGI have pretty much stopped for me.
/"front page news" to me is the google news, US, Business, and Technology tabs
All these predictions already started aging like milk, for example "Former Google CEO predicts AI will replace most programmers in a year" in April 2025.
The hall of fame will explode with failed predictions this year.
All of these things are vastly overvalued. Only one with tangible value is SpaceX because that's actually a moat-space. OAI holds no moat, has not done a good enough job to entrap their users, and has poor cost structure.
xAi isn't even a point of discussion.. it's just a scheme to rip off investors.
WeWork.. hard to take anyone seriously that ever invested in this bad boy.
Wework was a valid long bet that office properties would re-appreciate once the pandemic stopped — but now that AI is pulverizing the job market, any hope of that long bet paying off will require one of three things: a free-market boom in workers that require commercial property for success (e.g. physical invention companies like e.g. Saildrone due to not being able to homelab resins for safety reasons), and/or a market-wide rehiring event due to AI’s failure to deliver, and/or regulatory shifts in profit taxation and new business investment that trigger the above-described boom.
I know some commercial property owners in my hometown let their lowest-desirability storefronts sit vacant for twenty or thirty years (!) in order to prevent commercial property rent from falling across their entire portfolio. Turns out you can pay a lot of property taxes with not much revenue, and there hasn’t historically been regulatory pressure to pay an escalating “empty tax” to compel landlord pricing to behave according to supply and demand pricing models. Wework is still a terrible investment for an investor, but if you’re looking to bet long with no call and have the patient of decades, it’s not the worst plan. (There are certainly worse ways to gamble your money on the commercial property market!)
> any hope of that long bet paying off will require one of three things: a free-market boom in workers that require commercial property for success (e.g. physical invention companies like e.g. Saildrone due to not being able to homelab resins for safety reasons)
That doesn't make sense for WeWork, though. Aren't they a rent-a-generic desk company? If you have any kind of specialist requirements (e.g. "processing resins") they'd seem like a bad fit.
SpaceX valuation is also going to be interesting. Talking about CapEx, SpaceX has deorbiting assets on top of depreciating ones. And without Starlink the space launch market size is pretty small.
> SpaceX has deorbiting assets on top of depreciating ones
The deorbiting part is redundant. Their satellite are just that, a depreciating asset. Their lifetime seem to be 5 to 7 years. The important claim is if the total cost, including the launch, can be recuperate over that lifetime or not.
Is it? It’s less than obvious that the orbital datacenter boom will happen. Space mining could be a big deal but that’s not a foregone conclusion. Maybe someone will want to build a huge radio array on the far side of the moon, but I don’t expect hundreds of billions to be spent launching it — who would pay? Mars is less fashionable than it was a few years ago. Starlink is pretty impressive, but so is boring singlemode fiber, and the latter is increasingly being deployed everywhere.
(Obviously it will “skyrocket” unless someone comes up with a commercially viable launch system that doesn’t involve rocketing into the sky…)
There is Starlink and Amazon’s version, which both need many thousands of launches each (ignoring data centres)
There’s US military stuff like the starsheild, and it seems extremely likely china will follow suit.
Sat internet is changing the world rapidly where fibre can not be run. I saw it first hand in remote Australia, Yukon, Alaska and Africa. Not to mention ships and planes.
These projects are aggressively driving down launch costs, which increases demand for launches, which drives down launch costs which drives up demand.
Yep, SpaceX actually has a track record as an actual leader and innovator in it's niche (that's very CapEx intensive to enter), it's not really a moat but it's a lead that no other entity seems to be closing in on (on the contrary many would-be competitors seems to have almost given up).
As for OpenAI, I'm not sure if Altman is an idiot or fraudster, claims about reaching AGI/ASI with scaling and investing in that fashion was always delusional at best or fraudulent at worst, maybe he just hoped to divert enough money to engineers to make actual breakthroughs or that the hardware would become a moat but competitors have kept pace, and I fully agree that they are mostly now only hanging on with an insanely bad cost structure now.
> on the contrary many would-be competitors seems to have almost given up
maybe the smaller ones; Blue Origin succeeded, and French and Chinese nu-space companies will continue to get funding for decades - national governments are capable of footing the bill of large CapEx projects. SpaceX competition is irreversibly tied to US foreign policy, and only scientific amd commercial launches are price-sensitive
Twitter is already dead as everyone on Hacker news knew. Nobody I know uses X or whatever it's called now, xAI? I'm looking at Musk going bankrupt and as soon as that happens Trump will be Impeached.
They would need to have massive accounting fraud and lose public support. Unlike Enron, Nvidia actually sells tangible goods at a massive profit, and hasn't appeared to gloat over people getting screwed over.
> They would need to have massive accounting fraud and lose public support. Unlike Enron, Nvidia actually sells tangible goods at a massive profit, and hasn't appeared to gloat over people getting screwed over.
But what happens if they can no longer sell those tangible goods at a massive profit, and they gave return to their roots selling to gamers? When the boom ends is when massive accounting fraud could happen.
i think worst case they go back to selling GPUs to gamers. That would indeed be a massive front page story and movies would be made about it but I don't think the fraud is there. They have a pretty straightforward business, make GPU cards and sell them.
"They have a pretty straightforward business, make GPU cards and sell them."
They do, but that's not the (full) story here. Companies tend to easily migrate upwards, to a higher volume and/or higher profit margin market, and hardly (if ever) in the opposite direction. The painful restructuring necessary to enable this kind of reverse change is also damaging to the company brand, culture, and self-perception. If they ever get in such position, they may of course recover, but I wouldn't bet money on that.
