I’m pretty sure the banks view the intellectual property value as the security for their loan not the potential profits of the company.
I’ve worked for enough startups that even if your company folds and goes bankrupt with no business plan the ip generally can easily cover the outstanding loans.
I think that's got to be highly variable. I've worked for a couple of startups that went under and the IP had basically zero value. Who is going to pay for a failed implementation of a failed idea?
Well, the question isn't what OpenAI's intellectual property is worth right now, or what you expect it to be worth, but what it is likely to be worth after OpenAI has become insolvent (and few/none of the current employees are working on it). The most likely causes for it becoming insolvent are probably that another company out-innovates them, or that the revenues never come in (despite OpenAI being a market leader). In either case, OpenAI's IP is unlikely to be sufficiently superior to the competition's to warrant a large premium.
I am not sure how differentiated OpenAI's IP is, so I don't have a strong opinion, but it seems to me that OpenAI is worth a lot more as a package than it would be as a collection of pieces.
Their web-application is worth $200,000. The software of the training infrastructure is worth perhaps $2M; the inference infrastructure is worth perhaps $500,000. Their hardware is worth nothing in 3 years. Their B2B relations are worth perhaps $5M. The "data" they have is worth nothing in 5 years, because a sufficiently smart model will be able to learn without human feedback.
They have no moat. So, how do you get to $4B?
I think the models are wrong way too often for relatively simple queries, so unless they give a secret prompt like "be wrong a lot in the free version" to users, it's basically worthless.
> I’m pretty sure the banks view the intellectual property value as the security for their loan not the potential profits
Naa that takes too long to get any value from. If openAI goes pop, their IP isn't going to be worth much, because it'll die from competition, or the economy going to shit.
Like he said Microsoft is the most likely person to want to acquire the IP and employees. Amazon could be a potential second. Google paid 2.4b to license Windsurfs technology, OpenAI would go for far more.
Microsoft already has rights to the IP. If OpenAI goes bankrupt, they can hire the employees without buying the company (similar to their offer in 2023 when the board tried to fire Sam Altman). Although if OpenAI goes completely bust, that probably means interest in AI across the industry has tanked, so an acquihire makes little sense over just hiring available talent on the market.
That was one of the key parts of Silicon Valley Bank's business model. And that part worked pretty well: their collapse was caused by mismanaging interest rate risk and they never took many losses on loan defaults.
I’ve worked for enough startups that even if your company folds and goes bankrupt with no business plan the ip generally can easily cover the outstanding loans.