OpenAI, valued at $157 billion, isn't profitable. Should that be normal?
OpenAI, valued at $157 billion, isn't profitable. Should that be normal?
Maybe companies should be judged on their ability to effect change rather than hard dollars-and-cents.
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Isn't it a private company? They could say it's worth infinity trillion dollars...
No, not quite. They're funded by venture capitalists, who put money into investment rounds on the understanding (speculative gamble?) that the company will have a given future value. The last funding round was $6.6bn on the basis that the company will be worth $157bn when it is floated on the stock market. Ed Zitron has quite a good analysis on his page, and also why their business is a complete pile of shite:
They still aren't required to go through SEC regulations and can make up some PR nonsense evaluation.
They can say what they want, but investors won't invest if the ask is too high. These valuations are based on purchase of a given percent of shares, so you take the amount raised and divide by the percent sold and you get a valuation (a little more complicated than that, but that's the gist).