Microsoft is worth $4T, so if you buy one MSFT share only ~3% of that is invested in OpenAI. Even if OpenAI outperforms everyone's expectations (which at this point are already sky high), a tiny swing in some other Microsoft division will completely erase your gains.

Yeah, but on the plus side when the AI bubble bursts at least you've still got Excel.

Claude for Excel! https://news.ycombinator.com/item?id=45722639

No reason to believe it is a bubble

Lots of reasons to believe it's a bubble.

No hard proof it's a bubble. Bubbles can only be proved to have existed after they pop.

I can prove soap-bubbles to exist by seeing them, long before they pop. Alternately one can blow them away, again without letting them pop.

Different kind of bubble. Context clues are your friend here :-)

Markets trade on a magical growth valuation. Nothing you said matters at all at the moment and won’t for about 5 or so years. People are going to eat shit over and over when they keep talking like this, just look at what NVDA did today. It’s not going to stop.

5 years is a pretty long time to predict with confidence. Definitely agree that "the markets can remain irrational longer than you can remain solvent", but 5 years would be unusually long if you believe we're already in a bubble.

Fiat currencies are becoming meme tokens at this point. I think we are in a hyperinflation era and consumer price growth will simply have to catch-up to the stock market growth rate because wealth isn't being created right now, it's just being inflated.

All of those who are investing in stock market and thinking they are becoming rich might just realize that those were the paper gains when they will still not be able to afford anything with all the big numbers in their investment accounts.

I think it's a bit late for that.

Also, you have to consider the size of Microsoft relative to its ownership of OpenAI, future dilution, and how Microsoft itself will fare in the future. If, say, Microsoft is on a path towards decreasing relevance/marketshare/profitability, any gains from its stake in OpenAI may be offset by its diminishing fortunes.

> If, say, Microsoft is on a path towards decreasing relevance/marketshare/profitability

That’s a big if. I see a lot of people in big enterprises who would never even consider anything other than Microsoft and Azure.

C# and .NET have a bigger market share than what gets talked about in trendy circles

C#/.NET are nice. Azure/Microsoft Cloud not so nice. Idk, maybe I have some bias due to familiarity, but I find the GCP admin and tools to be so much more intuitive than the Azure (and AWS too, for that matter) counterparts.

Oh dear lord, GCP could be the intuitive one?! I have not used anything else but, dear lord, that's shocking and not at all surprising at the same time.

Yeah this is not the case at all lol. I actually find Azure to be far more intuitive after suffering through AWS and a little GCP. It certainly seems more stable in US regions than AWS.

One thing I will say is the Azure documentation is some of the most cumbersome to navigate I've ever experienced, there is a dearth of information in there, you just have to know how to find it.

Doesn't a dearth mean a lack of?

Probably. I guess I meant a shit ton, but written in a series of confusing "choose your own adventure" style bursts of 40 new browser tabs to figure anything out.

Any speculation on why none of them can make a UI and UX that is not 100% completely shit and makes you feel miserable and stressed out?

Couldn’t they just throw money at the problem? Or fire the criminals who designed it?

All the cloud platforms do not care about UI/UX at all. Although GCP gets honorable mention for being pretty consistent and I have to admit not too bad. But anyway none of them care because it’s expected that 90% of the usage of the platform will be via a CLI or some abstraction (k8s, terraform, etc etc). So, they put minimum effort into UI quality, usefulness, consistency, appearance. That’s my understanding anyway

a) Design is super hard when your product MUST do a lot (and GCP definitely has to do a lot)

b) You design for the audience. The complexity that person-who-would-ever-use-GCP will deal with is far beyond what the average internet user would ever endure.

Yeah, agreed. I love C# & the .NET platform; I do not feel the same way about Azure. It’s still way better than GCP, though.

The big question is if we are finally in a moment when big enterprises will be allowed to fail due to the infinite number of bad choices they make.

Because things are going to change soon. What nobody know is what things exactly, and in what direction.

yeah, this is a take I see by people who work in unix like environments (including macs). If anything Microsoft will grow much bigger. People are consolidating in Azure and away from GCP. easier to manage costs and integrate with their fleet.

Windows workstations and servers are now "joined" to Azure instead, where they used to be joined to domain controller servers. Microsoft will soon enough stop supporting that older domain controller design (soon as in a decade).

Entra (formerly Azure Active Directory) is definitely a huge enterprise Azure driver, and MS knows it.

And it’s crap.

Doesn't matter. It just needs to work well enough and Microsoft needs to be willing to use it as a point of leverage.

Both of which seem to be true.

Hell, I'm still amazed they got away with the Office-licenses-only-usable-on-Azure bullshit, but here we are.

compared to what? it isn't amazing but it's alright in my experience. it works and it seems like it's designed to give lots of people job security and lots of revenue streams for Microsoft though.

Reminds me of how Yahoo had a valuation in the negative billions with their Alibaba holdings taken into account:

https://www.cbsnews.com/news/wall-street-says-yahoos-worth-l...

Huh? Windows itself might have had it's heyday but MS is solidly at #2 for clouds only behind AWS with enterprise Windows shops that will be hard pressed to not use MS options if they go to the cloud (Google really has continued to fumble their cloud positions with their reputation for "killedbygoogle.com" nagging on everyones mind).

The biggest real threat to MS position is the Trump administration pushing foreign customers away with stuff like shutting down the ICJ Microsoft accounts, but that'll hurt AWS and Google equally much (The winners of that will be Alibaba and other foregin providers that can't compete in full enterprise stacks today).

Watch this week. Amazon cloud growth has been terrible (Google and Microsoft remains >30%). Amazon have basically no good offerings for AI which is where gcp is bringing to eat their lunch. Anthropic moving to TPU for inference is a big big signal.

100% this. The AWS of today is going to be the Hetzner or Digital Ocean of the future. They'll still have hyperscale, but will not be seen as innovating on first party products or a leader in the AI managed services industry. And frankly, they are currently doing a shit job of even this, because Oracle is in the same category and OCI has been eating everyone's lunch (for the past two years!).

Is OCI really eating everyone lunch? Sure, it's showing massive growth but that's because Oracle has been running around offering insane discounts.

We were cloud shopping, and they came by as well with REALLY good discount. Luckily our CTO was massively afraid of what would happen after that discount ran out.

You're making the roundabout argument that MSFT/OpenAI will one day go the way of Yahoo/Alibaba, which is wild.

I didn't make a prediction. I was pointing out factors to be aware of. Hence the use of "If, say" to denote a hypothetical.

Some people's convictions and lack of reading comprehension skills are certainly wild.

I think the stable coin company Tether is valued at 500 billion also.

Is the company valued at $500 billion or is the sum of the digital assets they’ve collateralised worth $500 billion?

Because if you buy the tokens you presumably do not own the company. And if you buy the company you hopefully don’t own the tokens - nor the assets that back the tokens.

I think I read that its valued at 500 billion based on their latest fund raise. I don't know the total holdings they have.

I have no interest in crypto, just wanted to mention this which was surprising to me when I heard it.

Wow, yes they claim to be raising a round valuing them at $500bn. Which is crazy given the market cap of their token is only apparently $173bn.

https://www.reuters.com/business/crypto-firm-tether-eyes-500...

I struggle to see how those numbers stack up.

For comparison Blackstone is worth ~$180bn with ~$1 trillion AUM.

So somehow this crypto firm and its investor think it can get a better return than Blackstone with a fraction of the assets. Now, sure, developing market and all that. But really? If it scaled to Blackstone assets level of $1 trillion then you’d expect the platform valuation to scale, perhaps not in lockstep but at least somewhat. So with $1 trillion in collateralised crypto does that make Tether worth $1.5 trillion? I’d love someone to explain that.

If my mom gives me 1000 dollars for 1% of my lemonade stand, that doesn't mean my stand is worth 100k. Tether is in talks with investors to mayb raise 20b at a 500b valuation. Keep in mind also that crypto investors overvalue companies to create the hype and then lobby for better regulations etc. It doesn't mean at all that someone would be interested to buy 100% of tether for 500b. Now, if they were public is a different story, like Tesla etc

Well indeed. That was pretty much my point.

What if a stranger who regularly invests and has criteria and terms/conditions and buys 1% of your lemonade stand for $1000.

Tether is projected to generate $15 billion in profits. So 500 billion is like a 33 times earnings multiple.

Now the main thing is how sustainable these earnings are and if they will continue to be a dominant player in stable coins and if there will continue to be demand for them.

Another difference to Blackstone is Tether takes 100% of the returns on the treasuries backing the coins, whereas Blackstone gets a small fee from AUM, and their goal is to make money for their investor clients.

If crypto wanted to really be decentralized they'd find a way to have stable coins backed by whatever assets where the returns of the assets still came to the stable coin holder, not some big centralized company.

> This also confirms the $500 billion valuation making OpenAI the most valuable private startup in the world.

SpaceX?

If SpaceX is still a “startup”, the word has lost all meaning.

It already has. Any tech company that is pre-IPO and still raising funding rounds is a "startup". I'm surprised there hasn't been someone to come up with a separate term for the stage of these kinds of companies.

That's just a privately owned tech company then. Lots of companies never IPO.

Still, I think there needs to be a specific term for a company that has recently had a funding round and will likely IPO in the future, like Stripe. That's a different category than a start-up or privately owned company that will never IPO like Koch Inc.

Around $350 to $400 billion from a couple sources I saw, but it's a lot of speculation

It’s odd to me in clouds you excluded AWS.

And included oracle first. OP is probably Larry

In reverse order of preferential choice.

Or for the inevitable crash when we discover that OpenAI is a round tripping Enron style disaster.

if you want to invest in open ai I think you can just buy it on NASDAQ private markets.

Not everyone can "just buy it". Investing in MSFT is accessible to many more people than private markets.

> "Microsoft’s IP rights now exclude OpenAI’s consumer hardware."

Relevant and under-appreciated.

   1. OpenAI considers its consumer hardware IP serious enough to include in the agreement (and this post)
   2. OpenAI thinks it's enough of a value differentiator they'd rather go alone than through MS as a hardware partner

OpenAI wearable eyeglasses incoming... (audio+cellular first, AR/camera second?)