A System of Agents brings Service-as-Software to life

Why OpenAI’s $157B valuation misreads AI’s future

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2024-11-25 13:00:09

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I break down the logic behind the company’s towering price tag and why I think the most valuable AI companies have yet to be built.

When OpenAI raised $6.6B earlier this month—the second-largest private funding round in history, topped only by its own $10B raise from Microsoft last January—it wasn’t just setting records. It was making an argument about where AI will create value and who stands to capture it.

Understanding this argument, both its logic and its limitations, sheds light on where I believe the most promising opportunities in AI are likely to emerge.

OpenAI’s growth has been nothing short of meteoric. Monthly revenue reached $300M in August 2023, a 1,700% increase from January. 10M users pay $20/month for ChatGPT, and the company projects $11.6B in revenue next year. 

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