There’s a strong chance the IPO window has passed. I just don’t see investors willing to jump in here given all the questions about the financial viability of AI.
The bulk of those investing now are broadly just pumping cash into the fire to keep their prior investments from going to zero.
We have hit a mass deceleration of what the current tech can do with transformers. The tech is also on a path to hyper-commoditization which will destroy the value of the big players as there zero moat to be had here. Absent a new major breakthrough it looks like we’re well on our way into the “trough of disillusionment” for the current AI hype cycle.
Will be interesting to see how all this plays out, but get your popcorn ready.
> There’s a strong chance the IPO window has passed
Ha, i'll take the other side of that bet. I'm not sure why you think they couldn't possibly IPO and you don't really specify why in your post.
Having been in the capital markets for 20 years, now is one of the better times to IPO and I'd bet that both OpenAI and Anthropic will IPO within 12 months.
There are lots of games you can play like releasing a small 10% float) if you are worried about not enough buyers.
I was in the capital markets during the COVID era, focusing on transactions for tech companies. I will take the bet that if OAI tries to IPO it will be WeWork 2.0 x100. Get ready for an even more creative version of “Community adjusted EBITDA”
On the real though, I am not sure how a 20yr veteran can say this is the best time for an IPO. Not only is a 10% float still absolutely massive, but the world is extremely unstable with the war in Iran and the US is in a recession when you factor out inflated growth driven by AI. Not to mention the Yen carry trade unwinding - there is so much loaded in the economy ready to blow up… I think the facade will collapse if OAI actually goes for it.
Umm the yen carry trade unwound in August of 2024. It hasn’t been a factor in the markets for over a year:)
> On the real though, I am not sure how a 20yr veteran can say this is the best time for an IPO.
The best time for an open AI and anthropic ipo. They are hot now, the macro environment doesn’t weigh into that calculus.
Also a 10% float isn’t massive, most companies ipo with anywhere from 20-40% of their total share count.
And being a 20 year veteran means you can cut through all the noise you mention and focuse in what matters. At all most all points in History there is doom and gloom, 20 years gives you the experience to know most of the doom and gloom never matters.
You go public when you get the chance.
I appreciate you comment and I hope I helped update your understanding of how things work!!
Oh, sorry I thought you meant the percentage would be huge.
Yes it’s a big ipo but early indications are that they’d be about 2x over subscribed if they ipo’d today from what the sell side is saying and I don’t doubt it from what other funds are saying.
Most fund managers have an IQ of 50. And they get paid by fees. They will put your pension money into OpenAI without a doubt, as it’s easier to participate, crash and shrug that stay out.
“Nobody got fired for hiring McKinsey” in the PE bros era.
There's a lot of reasons you don't want to IPO in the near- to mid-term, many based on energy suddenly being a lot more expensive than everybody thought and others based on money being a lot more expensive than everybody thought (and lenders being more risk-avers). All three of these things kind of go together.
Polymarket (for whatever it's worth) currently has OpenAI IPO at only 4% by end June and 40% by end December (and that's even for a small-float IPO as has become common).
The Venn diagram of people who have deep understanding of capital markets and people who like betting on stuff will have non-negligible overlap. Read some of the stories about Wall Street, especially from before it was all algorithms. Moreover, evidence of apparent insider trading on Polymarket, specifically for OpenAI, has already been shared on HN. Sounds pretty crazy to me to suggest that those odds can't tell us anything about the true probabilities. What's your reasoning?
Wisdom of the crowd, same as guessing jellybeans in a jar. The exact average is wrong, but it's still pretty damn close because the guesses are likely to follow a normal distribution.
If the hump of the normal distribution of these guesses is around 4% (or whatever) odds on, the actual answer is unlikely to be far from that.
> You can't reasonably draw any conclusion from betting without understanding who is betting and why.
Irrelevant; Polymarket is the reflection of the bettors view. When they place their bets, they don't care which way this goes, they only care to predict the direction correctly.
Unfortunately, it could be a case of the tail wagging the dog - even if the IPO would have been successful without polymarket existing, now that they have a signal from polymarket it is likely to be used as one of the weightings when they determine the correct time to IPO.
I checked Polymarket towards the end of February for the odds of US bombing Iran and they were vanishingly low. IIRC most bets were aiming for summer 2026. YMMV.
Wisdom of the crowd has some fatal flaws that are especially important when it comes to things like IPOs.
- Most significantly, most scientific research focuses on things that are actually amenable to guesses with a normal distribution, like "amount of jellybeans in a jar" or "length of the border between country A and country B". An IPO is a binary choice where it either goes public or not. There is no correct value to converge to.
- It has been shown that as bettors gain more information about the bets of others, predictions lose accuracy and bettors converge to a consensus value instead. It seems to me that online prediction markets would be extremely prone to this as the bets of other people are all there in the market price.
- Prediction markets generally become more accurate as the diversity of the bettor pool grows. The users of polymarket and Kalshi heavily skew towards young men from certain socioeconomic groups, who may be biased towards one or the other outcome.
In the case of an OpenAI IPO, it seems likely multiple of these would converge as people start to fall prey to groupthink because "everybody knows that they'll IPO soon" in their local media bubble.
The question isn't "will they IPO" the question is "when will they IPO" which is not a binary question. The rest of your point about Polymarket users now being mostly degenerate gamblers is true though.
That Polymarket traders believe an OpenAI IPO this quarter, or even this year, is unlikely (or else almost all of them are hedging, e.g. long on other AI stocks. Which seems unlikely.)
Anyone who thinks that position is wrong and it's >4% likely has a clear profit opportunity.
It only has $1m volume, so even that conclusion is a bit of a stretch. By comparison NCAA tournament has $15m, and US confirms aliens this year has $18m.
100% agreed. There's so much locked up appetite for IPOs, both from the tech crowd and the general public. There have been very few quality IPOs since COVID frankly.
I'll wager that the IPO market can actually absorb all three of these that yes, are the size of the last 10 years combined. The trading market itself is larger, as are values, and valuations.
I assume that to maximize value you see a standard lock and roll play here. The S-1 will declare the 10% release, with commentary about future (6 or 12 months) another 5%. Plus don't forget institutional. There's ample space here, even before the Nasdaq 100 changes that are probably coming into play. If those come into play then inflows accelerated, as did valuations.
Agreed. This year around is the best time for OpenAI related firm to IPO. The stock market has been resilient reaching and hovering around ATH. Along with them, SpaceX plans to IPO and will force index fund to purchase their shares at trillion dollar evaluation.
OpenAI and SpaceX firms need exit liquidity - and markets are ready!
My advise for retails folks is to stay invested in the market since these trillion dollar companies cannot afford market to tank at all.
There’s a strong chance the IPO window has passed. I just don’t see investors willing to jump in here given all the questions about the financial viability of AI.
My guess, it has barely started. I think nearly all AI IPOs have done well so far.
The revenue is in the ads. If they hit a decent run rate prior to the IPO then there's a viable path to profitablity and justification for the insane capex.
You must be living on a different planet than me. Enterprises are just now seeing that these technologies can actually have an impact, and the companies do not have a discretionary cost cap the same way consumers/hobbyists do, so they will pay based on value.
From the article: "You can see that in the recent iterations of ChatGPT. It has become such a sycophant, and creates answers and options, that you end up engaging with it. That’s juicing growth. Facebook style."
This is something I relalized lately. ChatGPT is juicing growth Facebook style. The last time, I asked it a medical question, it answered the question, but ended the answer with something like "Can I tell you one more thing from your X,Y,Z results which is most doctors miss ? " And I replied "yes" to it, and not just once.
I was curious what was going on. And Om nails it in this article - they have imported the Facebook rank and file and they are playing 'Farmville' now.
I was already not positive of what OpenAI is being seen as a corporate, but a "Facebook" version of OpenAI, scares the beejus out of me.
They have a bunch of mental health related lawsuit on them, yet last week I got an OpenAI newsletter suggesting I ask chatgpt about breathing exercises, mental health, etc.
The latest clickbait style can be mitigated by custom instructions.
I use:
"Tell it like it is; don't sugar-coat responses. Use academic university level explanations unless instructed otherwise.
Do not end with teaser offers or curiosity hooks. Give the full answer immediately. If related topics exist, show them as a brief bullet list. Use professional language and style."
Now I actually often like the related topics hooks, just not the clickbaity version from last few weeks.
If not for Codex performing so well for me from VS Code I'd happily migrate to Claude or Gemini.
In general "stickyness" among developers isn't that high, the way it is for consumers. Or the insane stickyness in "big boy contracts" government, accenture, etc,.
So I feel like the company which does these huge contracts will at the end eat up the coding business for nothing. The only way to avoid that is for anthropic to build up a huge IP lead in the code agent space. That is too difficult in my opinion. Because its hard to get exclusive access to code itself, the data advantage is not going to be there. Compute advantage is also difficult. And it's very difficult to hold on to architectural IP advantages in the LLM space.
Even if you get yourself embedded deep into traditional coding workflows (integrations with VCS, CI, IDEs, code forges, etc), usually SW infrastructure tends to like things decoupled through interfaces. Example: the most popular way to using code agents is the separate TUI application claude code which cats and greps your code. MCP, etc,. This means substitute-ability which is bad news.
I was thinking of ways these companies can actually get the coding business. One idea I had was to make proprietary context management tools that collect information over time and keep them permanent. And proprietary ways to correctly access them when needed. Here lock-in is real - you do the usual sleazy company things, you make it difficult to migrate "org understanding" out of your data format (it might even be technically difficult in reality). And that way there is perpetual lock-in. It even compounds over time. "Switch to my competitor and start your understanding from scratch reducing productivity by 37%, OR agree to my increased prices!". But amazing context management for coding tools is yet to be developed. Right now it is mostly slicing and combining a few markdown files, and grep, which is not exactly IP.
The quoted revenue numbers seem insane, but I guess it's the result of corporate deals where every developer seat is hundreds of dollars a month?
My job has been publicly promoting who's on top of the "AI use dashboard" while our whole product falls apart. Surely this house of cards has to collapse at some point, better get public money before it does.
+ asking you (prompting the human?) to keep the convo going in very specific ways
+ seemingly more personalization each day
both unfortunately crowd out the long tail which LLMs might otherwise help us explore, but of course the algorithms prefer putting us in positive feedback loops in echo chambers we like (and are conditioned to like)
One thing odd, maybe just to me, is why OpenAI has been stuffing its ranks with former Facebookers who are known to juice growth, find edges, and keep people addicted. They have little background in getting enterprises to buy into a product. Simo herself ran the Facebook app. That organization’s genius is consumer engagement: behavioral hooks, dopamine loops, the relentless optimization of the feed. You can see that in the recent iterations of ChatGPT. It has become such a sycophant, and creates answers and options, that you end up engaging with it. That’s juicing growth. Facebook style.
This is because ChatGPT is gearing up to sell ads. It's the only way to sustain a free chat service in the long term. Ads require engagement and usage. Hiring former Meta employees for this is smart business - even if HN crowd doesn't like it.
People say OpenAI is burning money and is on the verge of collapse. The same people will say OpenAI building an ads business on ChatGPT is "enshittifcation". These people are quite insufferable, no offense to the many who are exactly as I described.
I feel like OpenAI has been executing extremely well since it started leaning harder into Codex.
Right now, the people who really see it are power users of AI and software engineers. Most equity investors still don’t seem to get it.
It feels like the calm before the storm. A lot of the groundwork is being laid quietly beneath the surface.
And at least in the country where I live, I can already feel real momentum building around enterprise adoption, both in terms of partnerships and go-to-market structure.
I have noticed 5.3 in xtra high was a turd today. High used to be enough for most of my use cases. xhigh used to surprise me. Now it's incapable of following the very first instructions.
I just hope open source models get as good as last few month's top models before the enshittification has gone too far.
255 comments
The bulk of those investing now are broadly just pumping cash into the fire to keep their prior investments from going to zero.
We have hit a mass deceleration of what the current tech can do with transformers. The tech is also on a path to hyper-commoditization which will destroy the value of the big players as there zero moat to be had here. Absent a new major breakthrough it looks like we’re well on our way into the “trough of disillusionment” for the current AI hype cycle.
Will be interesting to see how all this plays out, but get your popcorn ready.
> There’s a strong chance the IPO window has passed
Ha, i'll take the other side of that bet. I'm not sure why you think they couldn't possibly IPO and you don't really specify why in your post.
Having been in the capital markets for 20 years, now is one of the better times to IPO and I'd bet that both OpenAI and Anthropic will IPO within 12 months.
There are lots of games you can play like releasing a small 10% float) if you are worried about not enough buyers.
On the real though, I am not sure how a 20yr veteran can say this is the best time for an IPO. Not only is a 10% float still absolutely massive, but the world is extremely unstable with the war in Iran and the US is in a recession when you factor out inflated growth driven by AI. Not to mention the Yen carry trade unwinding - there is so much loaded in the economy ready to blow up… I think the facade will collapse if OAI actually goes for it.
> On the real though, I am not sure how a 20yr veteran can say this is the best time for an IPO.
The best time for an open AI and anthropic ipo. They are hot now, the macro environment doesn’t weigh into that calculus.
Also a 10% float isn’t massive, most companies ipo with anywhere from 20-40% of their total share count.
And being a 20 year veteran means you can cut through all the noise you mention and focuse in what matters. At all most all points in History there is doom and gloom, 20 years gives you the experience to know most of the doom and gloom never matters.
You go public when you get the chance.
I appreciate you comment and I hope I helped update your understanding of how things work!!
Yes it’s a big ipo but early indications are that they’d be about 2x over subscribed if they ipo’d today from what the sell side is saying and I don’t doubt it from what other funds are saying.
“Nobody got fired for hiring McKinsey” in the PE bros era.
https://polymarket.com/event/openai-ipo-by
Well, I suppose you can draw the conclusion that "polymarket customers are interested in this topic"
Or even less charitable,
"People susceptible to gambling have been manipulated into spending money on this"
> What is this supposed to imply?
Wisdom of the crowd, same as guessing jellybeans in a jar. The exact average is wrong, but it's still pretty damn close because the guesses are likely to follow a normal distribution.
If the hump of the normal distribution of these guesses is around 4% (or whatever) odds on, the actual answer is unlikely to be far from that.
> You can't reasonably draw any conclusion from betting without understanding who is betting and why.
Irrelevant; Polymarket is the reflection of the bettors view. When they place their bets, they don't care which way this goes, they only care to predict the direction correctly.
Unfortunately, it could be a case of the tail wagging the dog - even if the IPO would have been successful without polymarket existing, now that they have a signal from polymarket it is likely to be used as one of the weightings when they determine the correct time to IPO.
> Wisdom of the crowd
I checked Polymarket towards the end of February for the odds of US bombing Iran and they were vanishingly low. IIRC most bets were aiming for summer 2026. YMMV.
- Most significantly, most scientific research focuses on things that are actually amenable to guesses with a normal distribution, like "amount of jellybeans in a jar" or "length of the border between country A and country B". An IPO is a binary choice where it either goes public or not. There is no correct value to converge to.
- It has been shown that as bettors gain more information about the bets of others, predictions lose accuracy and bettors converge to a consensus value instead. It seems to me that online prediction markets would be extremely prone to this as the bets of other people are all there in the market price.
- Prediction markets generally become more accurate as the diversity of the bettor pool grows. The users of polymarket and Kalshi heavily skew towards young men from certain socioeconomic groups, who may be biased towards one or the other outcome.
In the case of an OpenAI IPO, it seems likely multiple of these would converge as people start to fall prey to groupthink because "everybody knows that they'll IPO soon" in their local media bubble.
Anyone who thinks that position is wrong and it's >4% likely has a clear profit opportunity.
I'll wager that the IPO market can actually absorb all three of these that yes, are the size of the last 10 years combined. The trading market itself is larger, as are values, and valuations.
I assume that to maximize value you see a standard lock and roll play here. The S-1 will declare the 10% release, with commentary about future (6 or 12 months) another 5%. Plus don't forget institutional. There's ample space here, even before the Nasdaq 100 changes that are probably coming into play. If those come into play then inflows accelerated, as did valuations.
OpenAI and SpaceX firms need exit liquidity - and markets are ready!
My advise for retails folks is to stay invested in the market since these trillion dollar companies cannot afford market to tank at all.
Nasdaq's Shame
https://news.ycombinator.com/item?id=47392550
Very suspicious.
Opus: Let me build an interactive explainer for bitonic sort (builds diagram/no nonsense)
GPT:
"This algorithm feels weird but once you see it it clicks"
(Emoji) The Core Idea ...; (Emoji) High-Level Flow ...; (Emoji) Superpower ...; (Emoji) Why You Should Care;
"If you want, I can: ... (things it wants me to do next)"
This is something I relalized lately. ChatGPT is juicing growth Facebook style. The last time, I asked it a medical question, it answered the question, but ended the answer with something like "Can I tell you one more thing from your X,Y,Z results which is most doctors miss ? " And I replied "yes" to it, and not just once.
I was curious what was going on. And Om nails it in this article - they have imported the Facebook rank and file and they are playing 'Farmville' now.
I was already not positive of what OpenAI is being seen as a corporate, but a "Facebook" version of OpenAI, scares the beejus out of me.
They are absolutely farming engagement.
Now I actually often like the related topics hooks, just not the clickbaity version from last few weeks.
If not for Codex performing so well for me from VS Code I'd happily migrate to Claude or Gemini.
So I feel like the company which does these huge contracts will at the end eat up the coding business for nothing. The only way to avoid that is for anthropic to build up a huge IP lead in the code agent space. That is too difficult in my opinion. Because its hard to get exclusive access to code itself, the data advantage is not going to be there. Compute advantage is also difficult. And it's very difficult to hold on to architectural IP advantages in the LLM space.
Even if you get yourself embedded deep into traditional coding workflows (integrations with VCS, CI, IDEs, code forges, etc), usually SW infrastructure tends to like things decoupled through interfaces. Example: the most popular way to using code agents is the separate TUI application claude code which
cats andgreps your code. MCP, etc,. This means substitute-ability which is bad news.I was thinking of ways these companies can actually get the coding business. One idea I had was to make proprietary context management tools that collect information over time and keep them permanent. And proprietary ways to correctly access them when needed. Here lock-in is real - you do the usual sleazy company things, you make it difficult to migrate "org understanding" out of your data format (it might even be technically difficult in reality). And that way there is perpetual lock-in. It even compounds over time. "Switch to my competitor and start your understanding from scratch reducing productivity by 37%, OR agree to my increased prices!". But amazing context management for coding tools is yet to be developed. Right now it is mostly slicing and combining a few markdown files, and
grep, which is not exactly IP."The moat is state"
My job has been publicly promoting who's on top of the "AI use dashboard" while our whole product falls apart. Surely this house of cards has to collapse at some point, better get public money before it does.
>That’s juicing growth. Facebook style
yes, the sycophant noted by Om, but also:
+ asking you (prompting the human?) to keep the convo going in very specific ways
+ seemingly more personalization each day
both unfortunately crowd out the long tail which LLMs might otherwise help us explore, but of course the algorithms prefer putting us in positive feedback loops in echo chambers we like (and are conditioned to like)
People say OpenAI is burning money and is on the verge of collapse. The same people will say OpenAI building an ads business on ChatGPT is "enshittifcation". These people are quite insufferable, no offense to the many who are exactly as I described.
Right now, the people who really see it are power users of AI and software engineers. Most equity investors still don’t seem to get it.
It feels like the calm before the storm. A lot of the groundwork is being laid quietly beneath the surface.
And at least in the country where I live, I can already feel real momentum building around enterprise adoption, both in terms of partnerships and go-to-market structure.
Amazing that a few years ago Claude and Gemini didn't exist (one of those was barely useable a year ago even)
I have noticed 5.3 in xtra high was a turd today. High used to be enough for most of my use cases. xhigh used to surprise me. Now it's incapable of following the very first instructions.
I just hope open source models get as good as last few month's top models before the enshittification has gone too far.