I think the fact that we have so little information is the most important information we have. If OpenAI had a sound business plan and was on strong financial footing, they'd have IPO'd.
All of this continued stalling and obfuscation can only mean one thing, IMO: OpenAI has no long-term viability and they're desperately hoping for some new breakthrough to reinvent their business model before the VC money faucets turn off for good.
No he wasn't wearing a red ball on his nose. He didn't even smile saying this. Dead serious.
But for the US this is the last throw of the dice. All chips on red.
Silicon Valley No Revenue: https://www.youtube.com/watch?v=BzAdXyPYKQo
OTOH, if a company has a sound business plan and strong financial footing it may not need to IPO -- unless the founders or VCers want out ASAP.
OpenAI hasn’t had any problems getting impressive amounts of funding. So why ipo?
Who knows what Altman wants? It's moot what individual motivations are as he is definitely fronting for investors who have significant power in the business.
Public money comes with legal fiduciary duties.
The reason to IPO is to get private money out, materialise the whole valuation.
The oversimplified view that has been drilled into startup discussions for years has been that IPO is the singular goal for every startup and they need to get there as fast as possible, but that hasn't been true for a long while. There are high profile examples like Stripe with no intent to go public any time soon. Some public companies are even gradually doing share buybacks partially to remove their public exposure.
Being a public company kind of sucks in many ways. I'll admit my sample size is small, but every post-IPO CEO I've known has expressed some regrets about going public. It was a fascinating revelation to me after being raised on the idea that IPO is the ultimate victory goal of every startup.
The only reason they’re not doing it is by choice, because they want to find an optimal time to maximize their returns.
There is no “we’re trying to IPO but can’t”. If they were actually trying, it would be in motion.
Whatever private-market liquidity events they will be permitted to participate in will be highly disadvantaged compared to the other two groups.
What does adding a few more suckers to the pile of tens of millions of other suckers do to those that get the real benefits? It’s not like after they achieve their goals, the people who helped them would have the ramp or resources to recreate the process.
If you've made tens of millions of people unemployed over the timeline of a few years, then you no longer have nearly the market to sell goods and services - including your AI - to.
Assuming these guys answer that with "let's make UBI" - which is a huge assumption given the way SV fetishizes those who "create value" and looks down upon those who don't - you now basically have tech feudalism. The remaining upper crust "generously" pays the rest of the population enough to not starve until they die.
You'll basically have an entire society in stasis, with no hope of improving their lot, being given the bare minimum to keep humans alive, if that. Well, no hope of peacefully improving their lot.
It won't be a promised land at that point.
Comparisons to feudalism kind of sell the direness of the AGI vision short: in feudalism, the lord still depended on the peasants. The lord would be inconvenienced if he had them all killed. Not so with AGI! He won't even notice their gone.
Besides as much as I love UBI it requires Star Trek technology: ubiquitous space travel and replicators.
If He fails to arrive, or arrives late, they will be the railroad financiers in the Panic of '73.
Not being profitable in itself is not a problem or has not been historically. With software, there’s a bunch of investment into making the service but the variable cost of providing it is negligible. It’s ok not to be profitable because the growth of userbase will pay you back. Capex isn’t a thing, you can just rent somebody else’s from the cloud. This is how the world used to work pretty much for a quarter century, ever since the dot-com bubble. But OpenAI is not like it. Their variable cost is huge as is the capex to enable being able to even make that cost happen. It’s not that they are not profitable, it’s that their financial profile does not fit into anything this generation of decisionmakers is used to.
If a startup is riding a hype cycle and is one of two leaders in the global industry with unreal growth numbers, they can IPO whenever they want. The incentives lean toward doing an IPO before the hype runs out, not delaying it.
If they were worried about running out of VC money, going to the public (the P in IPO) would be the move.
Companies don't actually have to go public quickly or even at all, even though that's been drilled into us as the only goal of every investor-backed startup.
I'm not certain OpenAI or Anthropic have a viable business, either, but Spacex definitely pulled a massive scam.
Yes? They were geared up for IPO this year until pushing it back. See all the marketing shenanigans around solving mathematics for this month's flavour. They have a balancing act to manage between the hype and the reality of the business.
What about Stripe?
Remember a few weeks ago when all the AI labs said "we need to slow down, to uh, prevent destroying the world"?
Is there no end to this kind of lazy conspiracy theory
You see it time and time again.
Posters like simian are in denial and delusional about reality.
He ought to google ‘tacit collusion’.
I'm absolutely certain that we will reach that point, just not when. Could come sooner than we think though.
These are useful and too big to run locally.
The ultimate size of that business in terms of revenues and profits may not match current expectations, but it's also not 0
ok, where are:
- The economies of scale?
- The network effects?
- The switching costs?
- The intangible assets (e.g. brand?)
Running AI models for a fee has none of these. At best, there are some economies of scale for running a datacenter, but OpenAI and Anthropic have none.
The business logic is similar to the general transition to cloud. Corporations and individuals are better off paying someone else to manage physical hardware that they just access over the network. That is even more true of large, expensive, fancy AI GPUs than regular web servers.
OpenAI and Anthropic may both fail, or may not, I don't know. But I'm sure there is some kind of viable business running some kind of AI in the cloud.
The problem is that the investment does not expect "some kind of viable business" ROI needs to be in the order of several trillion for this to make any sense.
That money may not be made back in the way people hope.
But there is a whole ecosystem of companies on OpenRouter etc. who have a viable commodity business serving Chinese open source models on GPUs. I'm sure at least some kind of business like that will survive even if OpenAI and Anthropic completely fail. And I'm sure AWS, GCP and Azure will end up having something like that too.
All these figures are so utterly weaselly. AAR is a made up measure to make them look good. If they cannot show GAAP numbers, they are hiding something. Full stop. While as private companies they are under no legal obligation to show us their books, their PR and intent to go public requires it.
So yeah, if they stop training models forever, Anthropic will probably start making a profit... until someone else with better models comes along to eat their lunch.
[1] https://www.morningstar.com/news/marketwatch/2026091414/the-...
How confident are you that these firms are going to survive if they’re fudging the numbers?
Earnings Before Bad Things.
If an AI company can exclude the cost of training the new models they release every three months from the business of whether they are profitable, it would be shocking if they weren't profitable. And the figure is tiny compared to the valuation they appear to be seeking, and may only be positive because of a short term boost.
Steve Eisman said the other day that he suspects part of Anthropic's rush to get to IPO is that their third quarter figures are terrible.
And suggesting that maybe accounting norms should be changed so they could pretend that they were actually profitable despite the minor detail that they were consistently spending way more than they earned at any given point in time.
This was back in 2024 or so and the zeitgeist was still focused on the idea of the labs racing to AGI instead of building and selling products, with Sam Altman opining about whether money would even exist under AGI and his laughable suggestion that OpenAI might decide to give every American citizen shares in OpenAI for some reason.
If nothing else at least now they seem to be scrutinized more like regular tech megacorps instead of a sort of private yet benevolent Manhattan project of ascetic technopriests building a utopia machine.
And now they spend more time talking about building a doomsday machine that will kill you all and also show you ads.
My low level conspiracy theory is AI is encouraging habits of people not to read so noone can read statements like "we excluded our costs from our profit calculation"
In the last ~month, OpenAI announced a delay to its IPO and Anthropic put a relatively near-term range on its IPO date. These are very different signals.
they are 50/50 at best.
The reason is that companies can choose the best timing to go public - when their financial look the best - and they do. Anthropic trying to go public very soon is a good tell their financial look pretty decent. OpenAI postponing the IPO is a very good tell theirs look bad.
This is a fallacious assertion, there are so many big private companies with strong businesses that stay private for a whole variety of reasons. E.g. Stripe, Revolut, Databricks, etc.
You're letting your bias leak out here.