Comment by simianwords
11 days ago
... you think this is vindicating Ed Zitron? The dude is on a spree claiming the bubble will burst any time soon [1]. In fact Ed Zitron predicted that OpenAI will IPO sooner and not later [2]! This whole post is yet again another thing that he got wrong.
[1] https://www.youtube.com/results?search_query=ed+zitron+bubbl...
[2] https://www.wheresyoured.at/openai-cfo-news
> It's clear that both OpenAI and Anthropic are rushing toward a public offering so that their CEOs can cash out, and that their underlying economics are equal parts problematic and worrying.
OpenAI did confidentially file their S-1, which costs a ton of money to put together for the bankers and regulators to review. They did test the market and it looks like either the banks or people directly around Altman told him not to move forward. That doesn't mean Zitron was wrong about OpenAI IPOing. They took steps in that direction and then decided not to move forward. That's not his fault.
As far as the bubble bursting soon, we are starting to see some pretty concerning signals. The South Korean stock market triggered trading circuit breakers twice earlier this week to stop a runaway selloff in the tech sector. For reference, circuit breakers have only been triggered in the Korean market 10 times in history, and only 5 times ever in the US markets.
https://finance.yahoo.com/markets/world-indices/articles/kos...
FWIW I think there's a "Y2K never happened" future here, where the bubble never bursts (in the sense of some insane market valuation proving to be lunatic) but everyone does what they can to make sure it doesn't burst on them, and they pull back and the bubble just deflates.
Take for example the action on SPACs that made the "SPAC everything" era end.
Not popping doesn't seem possible to me, since all investment has been directed towards it, massive construction projects have been started, etc... The revenue needed to keep OpenAI and Anthropic afloat is insane and there's no way businesses are going to start paying the real price when there's no ROI compared to human expertise.
AGI is fundamentally impossible through data scaling like they tried to claim and achieving AGI is what all this depends on. The long tail problem will remain undefeated and the IPOs are a desperate move to get the cash needed to scale one last time.
They could have just kept improving the technology without all the psychosis and finding use cases and ways to make it more reliable but instead they bet everything on a language model becoming their slave god.
Slowly deflating would be nice, but I don't see how. In any case the economy is getting wrecked and any goodwill tech companies had with employees is gone after going completely adversarial towards them as soon as they had an opportunity to. The most profitable use case of gen-AI is still spams and scams.
I'm also feeling like that, not a quick burst like dot-com but a deflating bubble over next 24 months. During which AI costs rise and IPO valuation comes down.
Maybe my memory of dot-com is fuzzy (likely) and perhaps I didn't see early warning (or even didn't know how to see it). I feel like it all transpired over 3 months. And for those of us in Seattle the "death-knell" was the Nisqually quake that made much of Pioneer Square unsafe to occupy for a while.
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Maybe, it's certainly a possibility. I'm skeptical only because of the sheer amount of spending that Anthropic/OpenAI etc. are committed to. A soft deflation only makes sense to me if they start making a more profit-driven motion as opposed to growth at all costs, which I don't see happening.
Zitron's reporting shows that OpenAI's losses are scaling linearly with their growth, and their long-term valuation is based solely on the idea that they will eventually reverse this trend. Anthropic/OpenAI pumping the brakes on growth mode could have ripple effects throughout the entire market.
I think the more likely outcome is that these companies keep burning and demanding cash until investors call BS.
OAI canceling an IPO this year a week after he released their dogshit financials is not a coincidence and yes it does vindicate him.
He’s not shorting the market or calling a top. He’s saying that the bubble will pop because the underlying business model is and always will have a NEGATIVE ROI. Unless you’re speculating on semiconductor stocks the difference is irrelevant.
Do me a favor and tell me how much of the 1,000,000,000,000 spent / committed to a datacenter buildout has been returned to shareholders / creditors?
1. they didn't cancel their IPO and they were deliberate about having the option to time their IPO
2. he has tried over and over again to predict the bubble and peak [1] [2] [3]
3. that OpenAI is filing for an IPO next year is no vindication of Ed's claim when he specifically predicted the opposite (as I showed in the above comment)
4. OpenAI filing for an IPO next year has no bearing on its fundamentals
5. on Datacenters: Anthropic had to lease it from Elon's datacenter because they were too short on capacity and every one was complaining that their limits were too low
[1] Ed on 2024, "threaten to begin a collapse that I’ve been predicting since March" https://www.wheresyoured.at/burst-damage/
[2] Ed on 2024, "three quarters to prove itself before the apocalypse comes" https://www.wheresyoured.at/peakai/
[3] Ed on 2024, "things are beginning to collapse" https://www.wheresyoured.at/subprimeai/
Edit: the quality of discussion in this website is annoying sometimes.get downvoted for good faith discussion
> Edit: the quality of discussion in this website is annoying sometimes.get downvoted for good faith discussion
Ignore it and don't do this: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading."
https://news.ycombinator.com/newsguidelines.html
> OAI canceling an IPO this year a week after he released their dogshit financials
There is zero evidence of any causal link between him and this. The obvious one, instead, is SpaceX's volatility.
> Do me a favor and tell me how much of the 1,000,000,000,000 spent / committed to a datacenter buildout has been returned to shareholders / investors?
If Anthropic also delays its IPO, you'll have a point.
In what way is SpaceX's volatility an obvious cause? It would be one thing if SpaceX was down from its IPO price, but it's not, it's just down from a post-IPO peak. To me this has all the hallmarks of a backfilled rationalization.
> OpenAI’s advisers presented company executives with the option of waiting until 2027 to go public with a $1 trillion valuation, or lower the targeted valuation for a quicker I.P.O. Mr. Altman, said one person in contact with him on the topic, responded that any change to the trillion-dollar valuation was a nonstarter.
I really don't know how to read this and reach any conclusion other than, OpenAI leadership won't accept what financial analysts consider to be a rational valuation of its stock.
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> There is zero evidence of any causal link between him and this.
How would there be? He's a blogger and a youtuber, they are a private company with secretive financials, bankers involved in pre-IPO work don't talk openly. Nobody is going to say "we only decided not to do this because of a youtuber" because that would make them look like the ill-informed, over-eager idiots they've been to let this nonsense get this far.
Why would there be any concrete evidence it was down to him specifically, and not, say, dozens of finance people saying "what the *fuck* is that marketing budget about — that's so large it looks like something's been hidden in it" after reading about it from him and the FT and everyone else who was involved.
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SpaceX demonstrated that the public markets have a limited tolerance for a multi-trillion dollar company that doesn’t make any money.
Ed’s leaks demonstrated that OAI doesn’t make money (even on inference).
Put these two together and I think the conclusion is pretty obvious.
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I like that people will post stuff like “Ed Zitron is always wrong! Look at this wrong claim he made!” and then link to him not making that claim at all.
“Rushing toward a public offering so that their CEOs can cash out” is not a prediction of a specific time to IPO, and is supported by OpenAI’s own public statement two months after that was published
https://openai.com/index/openai-submits-confidential-s-1/
I don't even know what you are trying to say, I opened your link
> We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.
So... OpenAI has specifically said that they have not decided on the timing and it may be a while. And now we have news that they are waiting till next year.
What do you think is supported by whom? Being more clear and concrete helps the discussion.
>it may be a while
Or sooner. It says sooner or later. It only means “later” if you don’t read the “sooner” part. Choosing to read selectively isn’t One Weird Trick To Own A Blogger. “This post about submitting a draft S1 to the SEC is proof that they don’t want to go public” lmao
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