Comment by sandeepkd
13 hours ago
Looks like there is only limited money in the market and there is a race to get it first. Wonder if the free market concept should move the prices down in such a scenario?
13 hours ago
Looks like there is only limited money in the market and there is a race to get it first. Wonder if the free market concept should move the prices down in such a scenario?
I think it's because the private market can't possibly go any higher. OpenAI is already valued at around $1 trillion and just raised $122b.
The only next step is the public market.
>the private market can't possibly go any higher
Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble:
https://www.astralcodexten.com/p/you-have-only-x-years-to-es...
P/E is not an indicator of available to deployed capital. Just in the EU alone there is about €12 trillion in bank deposits which could be invested. There is no lack of liquid capital to be invested.
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The M2 money supply is ~4x higher now than in 1999. Does that indicate there is a lot more runway now, than then, at least on that metric?
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> Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble:
Shiller PE is near 44. Japan had an equivalent price to earnings ratio of over 70 during their 1989 bubble.
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> I think it's because the private market can't possibly go any higher. OpenAI is already valued at around $1 trillion and just raised $122b.
How many public companies even get 122b? They definitely can go higher if they really are that valuable. With public companies come the other factors which might not be based on the actual value and can cause people to throw money.
Meanwhile Chinese AI companies outputting open weight models nearly as good are valued in the low single digit billions. Go figure.
Current chinese AI company valuations (USD):
Knowledge Atlas Technology (Z.ai): 57B
MiniMax Group: 26B
Deepseek: 45B (rumored)
> Meanwhile Chinese AI companies outputting open weight models nearly as good are valued in the low single digit billions.
That's surprising to me; I thought (or heard) that it was low 3-digit millions.
Wasn't there a Chinese ai startup that got bought recently but the government wouldn't let the founders leave china? I think stuff like that would have an effect on valuation
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That's the premium for being a Western company in a Western market, yes.
They are dirty communists.
We prefer red blooded American scam artists here, buddy. Hell, Elon probably found some bullshit way to recognize Chinese AI as Twitter revenue, used to buy cyberattacks to sell to SpaceX.
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That's not how money works. It's not an asset which is subject to conservation of matter like gold.
Banks make money by giving out loans is a meme, but it's actually true here. You kind of need collateral to do that, but a stock of a company which has revenue is a perfectly cromulent collateral even by strict standards. It's not even some infinite money glitch - it's kinda how the whole system is supposed to work.
The stock market is largely about betting on expectations of future value while money is just a token which is used to settle things. E.g. if you think about simplified mechanics of IPO, say, investor Alice buys OpenAI shares, OpenAI gets the money and Alice has shares. If for simplicity we assume that Alice and OpenAI use same bank and there are no intermediaries, then it literally just updates two cells in a database. And Alice now has shares which is an asset of known value, thus can be borrowed against, etc. Also, say, OpenAI can use that money to repay debt, then perhaps lender would buy SpaceX stocks - it's not like money was withdrawn from the system.
Of course, there can be some interference: multiple companies do IPO around same time it would reduce FOMO, and if they did it literally in one day there might be lack of liquidity.
There are regulations that mostly forbid stock movements from creating new money. The money available for an IPO is pretty much finite and independent of those companies' actions.
> free market concept should move the prices down
Kind of a radical idea. I did read about that in economy books way back when at uni... but I don't think it's really happening actual. At least my walled doesn't seem to get it.
PS: it's a joke, free market works when there is competition. VCs are making damn sure it's just enough monopolies that they get wealthier while consumers themselves get milked. Without antitrust actually being enforced, there is no free market.
Prices do go down for electronics:
https://ourworldindata.org/grapher/price-changes-consumer-go...
That was then and this is now. RAM and storage prices are through the roof, effectively erasing the price drops of the latest 15 years or so.
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Since it appears that LLMs can't achieve AGI and lose hallucinations, I presume a new company will appear with a new architecture that can - what happens to the current behemoths and their stock prices? Will they jump architectures?
Splendidly interesting times.
This is also my understanding of why Twitter (and thus Grok) was acquired by SpaceX (which was already having an IPO). Less to do with GPUs in space, more to do with the first way to invest 'directly in AI companies without a proxy (e.g. nvidia).
Don't worry, the Fed can create infinite money!
It's good that there is now a new head of Fed for this.