I think the argument is that the valuation is so high because the enormous growth IS priced in, but still being far from guaranteed. Meaning there's only downside: if the enormous growth is realized it would be a wash for your investment since it is already priced in, and in the plausible scenario it fails spectacularly or only grows moderately your investment will lose a lot of value.
It's an IPO, nothing is "priced in" until is actually being transacted in the secondary market
There's a good reason IPOs are shown to underperform the market
Yes, lots of downsides on this one, but people see it as a call option on a future where AI replaces all jobs, what would you pay for that? A rational response from someone that accepts the premise of the question is likely "anything"
> It's an IPO, nothing is "priced in" until is actually being transacted in the secondary market
Well, priced into the IPO price by Antrophic. It was you who said it would be priced into the IPO at launch, I just used the same terminology you did: "There's not going to be an IPO at a price where everyone agree that it'll see a 30% growth over 30 years. Obviously that'd be priced in."
If you don't think one should assume the market's expectations of future results are accurately priced into the IPO price, it's an argument in favour of the comment you tried to argue against, not contrary to it.
> Yes, lots of downsides on this one, but people see it as a call option on a future where AI replaces all jobs, what would you pay for that? A rational response from someone that accepts the premise of the question is likely "anything"
Even if you buy that premise, there are more premises needed. First (1) AI replaces all jobs, then (2) private AI models will be able to convert it into profit without being contested by open models, razor thin margins due to competition, regulation/nationalisation, or general societal upheaval, finally (3) Antrophic specifically will "win the race" and capture the lion's share of that market.
That being said, I would not bet any money on the stock losing value in any reasonable time frame either. It's enough to take a quick look at Tesla to see that fundamentals or actual results does not necessarily matter for a hyped sci-fi stock, even in the long term.
If that's what you think "priced in" means, I've a brand new company with a 1 trillion $ valuation priced in, would you like to buy some shares from me?
> It was you who said it would be priced into the IPO at launch
I actually said in my initial comment that the "priced in" argument is not even worth invoking, but here we are.
> If you don't think one should assume the market's expectations of future results are accurately priced into the IPO price, it's an argument in favour of the comment you tried to argue against, not contrary to it.
The comment I answered to initially said "Unless you have special insight, you should assume all stocks are equally good buys.", written by someone else. To which I replied "I smell your efficient market hypothesis argument, before you even begin just keep in mind that does not apply here, it's an IPO, the price is not set by the secondary market"
> (2) private AI models will be able to convert it into profit without being contested from open models, razor thin margins due to competition, regulation/nationalisation, or general societal upheaval, finally (3) Antrophic specifically will "win the race" and capture the lion's share of that market.
Sorry, I confused you with the user thomasahle that I initially responded to, which explains the confusion here. I don't think we disagree with each other.
It is my belief that while humans exist, there will be markets, one way or another. There will always be exchanges of value between people. There will always be people at different levels, and a form o currency to qualify for the higher levels. Even in communist societies this was true
So, a future where there is no market can only be a future where humans are extinct, in my opinion (some form of communism won't work)
If someone believes markets will still exist (one form or another) and there will still be exchanges of value between people, even in the most maximalist AI future - then I think it becomes rational for said person to seriously consider buying AI labs, even at stupid valuations
Admittedly I've formulated my previous comment wrong, I should've written "a future where AI has the potential to fulfill all jobs known today", instead of "a future where AI replaces all jobs"
As mentioned in other comments, I'm not trying to convince anyone to do anything, I'm here just to argue different points and positions
Production of surplus value is what generally qualifies as a "job" — I certainly agree there is potential for tools to replace/augment any job we think of, but we'll simultaneously continue inventing new jobs.
Just like economies are mostly a service-industry today, a concept that barely made any sense 100 years ago.
Still, buying tooling companies' shares makes sense when that company has something which is hard for anyone else to replicate: but we are seeing that it really is not with a number of proprietary and open weights competitors who generally go head-to-head with minor differences in capability.
This only to say that believing valuations are unreasonable does not mean you can't even be an "AI maximallist" — but markets do not work in a simple cost/value-provided equation for a long time now.
According to Scott Aaronsson, OpenAI set their agents on 8000 different problems, and got 372 final proofs. Even spending twice the original effort on simplifying and reworking those proofs so that they do not "feel like something written by someone who’s on psychedelics" would only increase the compute by less than 10% (assuming all the agents had a similar token budget).
The fact that they did not do so can only mean that either (1) their agents currently lack the capability to do it, or (2) OpenAI are completely indifferent and do not care in the slightest if the proofs are understood or not.
> The fact that they did not do so can only mean that either (1) their agents currently lack the capability to do it, or (2) OpenAI are completely indifferent and do not care in the slightest if the proofs are understood or not.
Come now, this is kind of unreasonable. When you're working on a new technology, you first get the ugly, inconvenient-to-use prototypes functioning with the core new thing you need; then you work on packaging it up into a format useable in production. I'm sure the very first digital camera sensors weren't very useful for photographers either; but it isn't really even possible to build the rest of the technology required to turn raw output of a digital sensor into something a professional photographer can use until you have the raw output itself.
The research is still on going on the raw output; getting things to the next stage, where the results are widely useable by professional mathematicians (and then on to engineers and scientists to whom the results would be practically useful), is a whole new research area.
Seems like you are just subscribing to the first option I gave, "their agents currently lack the capability to do it", but saying you think they will be more capable in the future if they can move away from the inconvenient-to-use prototypes after more research. Thinking it might be possible in the future is not in disagreement with anything I said, so I am not sure what you thought was unreasonable about my description.
Imagine someone looking at digital camera researchers showcasing a ground-breaking new sensor, and reacting by saying "Well obviously they're completely indifferent and do not care in the slightest if their work is used by real photographers or not."
Like, "Orr... maybe they care a lot, but haven't gotten to that part yet?"
You are conflating the two options with each other (lack of capability vs indifference). One of them is true, not necessarily both ("or", not "and"). I did not claim a lack of capability was the same as indifference.
They claim each result used three hours of compute on average. Even spending significantly more on simplifying and reworking would delay the release with a single day at most. If avoiding such a minor delay took precedence over (2), I think "indifference" is the correct term. It has also been a while since the release now, so there is ample opportunity to post follow ups if time pressure was the only concern.
Why do that when they can spend more hours extending QRH to a proof of the full Riemann Hypothesis? The opportunity cost of digging up small potatoes is the whole enchilada.
The main bitterness is pretty clearly directed at Google's handling of internal sexism and sexual misconduct, culminating at what seems to be pretty direct (but underhanded) retaliation at the organizers of the walkout during a time when they gathered sustained internal and external publicity, leading to her immediate departure. Are you claiming the real spark of that conflict was her "being bitter at the people around her due to being unable to maintain relevancy" and not any real convictions she held regarding the known misconduct at the company? Seems like a dubious accusation to me in that case.
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