Comment by aurareturn
10 hours ago
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.
10 hours ago
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.
Basel capital rules are supposed to mitigate against the insane idea of banks deploying all their capital in a single high risk stock.
If you think you can get all the _public_ to pull their short term bank deposits into stock .. well, (a) you've not met the Germans, and (b) that is how the economy of Albania collapsed in a pyramid scheme.
There is the amount of capital which is technically available, and the amount of capital which is available in practice.
If EU depositors want exposure to US AI firms, why didn't they already withdraw their money to invest in Microsoft/Google/etc.? I'm a bit doubtful that an OpenAI IPO is going to trigger major shifts in asset allocation.
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?
The P/E ratio references "price" and "earnings". Both "price" and "earnings" are denominated using money. So it's not obvious to me how an increase in the money supply should affect this ratio.
BTW, in Shiller's book which was published right as the dot-com bubble popped, he has a chapter listing out similar late 90s structural factors, many of which could lead to permanently higher stock prices in theory.
Nasdaq is about 8x higher now than then, so 4x higher M2 is tight. Ofc there is always a chance that this time is different and that the markets are genuinely much more efficient :-)
> 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.
Hm, wasn't Japan's bubble in part due to easy credit? Are we going to see easy credit in the US given recent memories of inflation?
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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
Yeah, Manus were supposed to be acquired by FB, but the Chinese government nixed it.
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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.
I believe that Elon is in fact selling inference data center time under SpaceX (which does own Twitter), some of which may be used to buy cybertrucks.