Comment by nly
7 hours ago
It's hard to see how they become profitable enough to justify current valuations.
The numbers are just mind boggling even in the optimistic scenario.
7 hours ago
It's hard to see how they become profitable enough to justify current valuations.
The numbers are just mind boggling even in the optimistic scenario.
I can see a world where if everything they do pans out, on average 1B "entities" end up paying 20$/mo to openAI, via the myriad of integrations they end up supporting. Where entity can be a user, and one human can have many entities (i.e. a work account where the company pays, a personal account, etc). That'd be a quarter of a T$ revenue / year. Dunno, while the number is so large it's hard to compute, it somewhat seems plausible.
And then they'll ruin it all by injecting adverts to get an extra $20b a year in revenue
If they are able to actually successfully pivot into ads as a business model, it's very easy to justify the valuation: Just look at Google/Meta.
I'm personally skeptical that they are able to pull off ads, at least on the short timescale they likely need to. They more or less have to nurture/disrupt a whole SEO industry, and the way big corps allocate advertising budgets are very slow to shift (many are still struggling to find their footing in social media advertising).
> If they are able to actually successfully pivot into ads as a business model, it's very easy to justify the valuation: Just look at Google/Meta.
Ads are not just a switch one can turn on. Firstly, you need to build a decent ad serving/targeting/pacing engine. Secondly (and more importantly) you need to hire a shed ton of sales people (in many, many geos) and then ramp them all up (difficult if you're building the product at the same time).
And then you need to keep at it for 3-5 years minimum before you'll finally get the bigger/more conservative brands/agencies/etc to buy in properly.
At that point, you'll make decent money, after accounting for all of the costs. I'm not sure that you'll make enough money, but it would definitely stanch their bleeding a little.
tl;dr if they haven't already built this ad product, it's unlikely to make a material difference before 2030.