OpenAI could soon be worth a half-trilly
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
Good afternoon and happy Wednesday, friends. There’s a tradition on Wall Street regarding Snap’s quarterly earnings. It goes something like this: Snap reports its trailing financial performance, and investors dramatically reprice its equity. Up or down, Snap’s stock tends to move like an elevator.
This quarter’s earnings cycle is no different. Snap shares are off 18% this morning after mostly meeting revenue expectations ($1.34 billion reported compared to $1.35 billion expected, CNBC reports). Sadly for the social company, its global average revenue per user, or ARPU, came in light. Cross that with slowing revenue growth and down goes the stock. Pour one out for everyone working there today.
Snap is not alone in taking stick this morning. After reporting record revenue ($7.7 billion, +32%), and “record free cash flow,” shares of AMD are down 6% this morning. Why the decline? The company’s beat was more predicated on gaming revenue than AI-ish datacenter spend. Investors didn’t love that.
But while investors are pickier than a toddler at mealtime, I can confirm that you are above expectations and that your stock is rising. To work! — ALex
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Round of the Day: OpenMind, $20M, wants to help robots talk to one another.
Round of the Day, redux: Clay, $100M, helps companies sell stuff, expects $100M in revenue this year with limited burn.
📉 Trending Down: Datacenter costs? … killswitches, backdoors … Grok’s family use … free speech in India … American democracy during the gerrymandering wars … domestic rooftop solar … domestic wind power … friendship between OpenAI and the Times … mRNA vaccines … power data …
OpenAI could soon be worth a half-trilly
The financial press this morning is alight with the news that OpenAI is in the early stages of preparing a secondary share sale at a $500 billion valuation. Bloomberg reports that billions of dollars of shares could trade hands, and that Thrive Capital may be a buyer of employee shares at the half-trillion dollar price tag. (This is not this, mind.)
It’s not hard to sort out why. OpenAI’s revenue growth from $10 billion (annualized) to either $12 billion or $13 billion in recent months — and reporting that it now sports five million business customers, up from three million in June —underscores that the Sam Altman and Friends AI shop is still firmly in grip of product-market fit.
Even more, OpenAI is currently enjoying a victory lap following the release of two ‘open’ models: