Pre-Product AI 'Company' Now Valued at $30 Billion 26
Financial Times: Venture capitalists have always been happy to back pre-profit companies. Back in the halcyon ZIRP era, they became happy to finance pre-revenue companies. But at least even Juicero, Wag and the Fyre Festival had an actual product. From Bloomberg over the weekend: "OpenAI co-founder Ilya Sutskever is raising more than $1 billion for his start-up at a valuation of over $30 billion, according to a person familiar with the matter -- vaulting the nascent venture into the ranks of the world's most valuable private technology companies.
Greenoaks Capital Partners, a San Francisco-based venture capital firm, is leading the deal for the start-up, Safe Superintelligence, and plans to invest $500 million, said the person, who asked not to be identified discussing private information. Greenoaks is also an investor in AI companies Scale AI and Databricks.
The round marks a significant valuation jump from the $5 billion that Sutskever's company was worth before, according to Reuters, which earlier reported some details of the new funding. The financing talks are ongoing and the details could still change."
OK, so a jump from a $5bn valuation less than half a year ago to $30bn must mean that Safe Superintelligence has an absolutely killer product right? SSI focuses on developing safe AI systems. It isn't generating revenue yet and doesn't intend to sell AI products in the near future. "This company is special in that its first product will be the safe superintelligence, and it will not do anything else up until then," Sutskever told Bloomberg in June. "It will be fully insulated from the outside pressures of having to deal with a large and complicated product and having to be stuck in a competitive rat race."
Greenoaks Capital Partners, a San Francisco-based venture capital firm, is leading the deal for the start-up, Safe Superintelligence, and plans to invest $500 million, said the person, who asked not to be identified discussing private information. Greenoaks is also an investor in AI companies Scale AI and Databricks.
The round marks a significant valuation jump from the $5 billion that Sutskever's company was worth before, according to Reuters, which earlier reported some details of the new funding. The financing talks are ongoing and the details could still change."
OK, so a jump from a $5bn valuation less than half a year ago to $30bn must mean that Safe Superintelligence has an absolutely killer product right? SSI focuses on developing safe AI systems. It isn't generating revenue yet and doesn't intend to sell AI products in the near future. "This company is special in that its first product will be the safe superintelligence, and it will not do anything else up until then," Sutskever told Bloomberg in June. "It will be fully insulated from the outside pressures of having to deal with a large and complicated product and having to be stuck in a competitive rat race."
" An undertaking of great advantage" (Score:2)
"but nobody to know what it is"
So how much value for a pre company company? (Score:2)
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AI has no worth
Truly, you are a stupid person.
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Could be worse. (Score:1)
Musk is targeting a 75B valuation for x.AI. Now, x.AI has "a product" (but with tiny revenue proportional to costs) and a couple billion dollars in datacentres, but most of the value is purely speculative. And if you're going to speculate, if the choice is Sutskever vs. Musk, I'm putting money on Sutskever every time. Musk has ridiculous ideas about how AI development works (and is very pro-censorship [bsky.app], though that's a side point), whereas Sustskever is arguably one of the most knowledgeable and credentia
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the only thing he ever seems to think about is scale.
Which is frankly weird.
From a mathematical perspective, the only thing holding transformers back are the insufficiencies in how they're trained.
Throwing more tokens are them will make them smarter, but it won't fix the problems.
Fortunately, there are really fucking smart people trying to figure out smarter ways to evolve these nets, and even improving transformers in general, though frankly- from an architectural perspective, the transformer is universal and complete- you're only working on performance
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I mean, it does kinda, but very inefficiently. LLMs tend to learn the "easy" solutions early and these easy solutions tend to dominate the weights, but harder solutions that help generalize problems better take exponentially more training time (grokking) for the models to learn. So while more compute is "a" solution, it's neither a "good" solution nor a "practical" solution.
An example might be: " 'The schoolbus passed the racecar because it was going so fast.' - which was going fast, the schoolbus or the
It Might Work... (Score:4, Interesting)
The standard model is to start with a (minimal) product and improve its "market fit" by acquiring customers and iterating. There's a very good reason why that's the standard model: history has shown that if you just take a ton of cash and cloister yourself to build the "perfect product", at the end you're likely to have a "perfect product" that no one actually wants to buy.
That being said ... venture funding is already one step up from gambling, and even with the standard model something like one in ten startups fail. Also, building AI company does require substantial up-front investment.
So yeah, this is probably a terrible idea, but like I said, so are most venture investments. It probably has as much chance of success as any other startup, with a much bigger payoff if it does succeed.
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That being said ... venture funding is already one step up from gambling, and even with the standard model something like one in ten startups fail. Also, building AI company does require substantial up-front investment.
I'm pretty sure that it's one in ten startups succeed and not "fail". Back in the 2000s I changed jobs to join a startup that did succeed and got bought out by a Fortune 500 company and it was a pretty interesting experience to be part of a successful startup, even if joining late in the "startup" period. I can't believe most startups make it. After we got bought out, all our top management left by choice. The acquiring company was willing to give them jobs, but they chose to move on. Shortly af
Price != Value (Score:2)
Re: Price != Value (Score:2)
I worked as a tech sector analyst at a small securities firm. In this scenario, we would say that you are investing in the management team.
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In economic theory, the "value" of a thing is the price at which a buyer and seller agree. By that definition, the buyers of the stock do indeed value the company at the stated amount, because that is what they are willing to pay for the shares.
Short (Score:2)
Cannot short private equity.
That is all you need to know.
This article is shit (Score:2)
* destroy humanity
* is not controlled by oligarchs
* does not lead to ultra-late-capitalist dystopia
And all you can do is complain it has no current profits. Almost makes me think y'all deserve a dystopian AI outcome.
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Almost makes me think y'all deserve a dystopian AI outcome.
If that isn't abundantly clear to you, sir, madame, or other- I'm afraid you haven't been paying attention :)
SSI, a division of Lumon Industries (Score:2)
Re: SSI, a division of Lumon Industries (Score:2)
Maybe good, maybe not (Score:2)
"This company is special in that its first product will be the safe superintelligence, and it will not do anything else up until then," Sutskever told Bloomberg in June. "It will be fully insulated from the outside pressures of having to deal with a large and complicated product and having to be stuck in a competitive rat race."
That reminds me of a crazily well-funded skunkworks - minus the corporation-that-actually-makes-and-sells-stuff which would normally host / fund such a process. From that standpoint it might be good. Also, not having to respond to competitors' products and get a jump on the market may mean more thorough, buttoned-down, maintainable code.
OTOH, the traditional skunkworks has a flying-under-the-radar feel that lends some urgency to the work. The kind of funding described in TFS might be the recipe for a bloate
Bubbling bubble is bubbly (Score:3)
And here we go with another tech bubble. Overvaluation is going to be a problem if this is any indication.
The good news for all the investors, IMHO, is that the bubble will not burst for a while. It might even take an advanced AI to figure out that AI is not worth this much, because people tend to do this dumb stuff all the time.
But if you have a position in AI, learn to read tea leaves, because collapse is coming and you will want to pull out before the earthshattering "POP!" I dunno, maybe 5 years from now?
Literally every player in the AI market is over their skis on this, I think.
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It's going to happen a lot sooner. We're currently in the "a little bit at first" phase and are rapidly approaching the "then all at once" phase. Doesn't help that there's some uncertainty in the markets due to specific external factors right now.
Doesnt seem nonsensical (Score:2)
* Im not sure that position makes any sense as AI becomes cheaper but this seems to be the theory driving valuations of dozens of major tech companies the last year or so.
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I would argue that "Safe AI" and "Superintelligence" are both novel and untested ideas. There is no precedent for "safe" AI, and there isn't even an actual definition of "super" intelligence.
"Super" intelligence? (Score:2)
What in the world is that?
Whatever the marketers want it to mean, I suppose.
I'm sure someone has said this before, (Score:2)