- OpenAI seeking a $90 billion valuation has sparked many hilarious reactions on X.
- Some users even asked Elon Musk to short the stock to get back at Bill Gates, who once shorted Tesla.
- If Altman succeeds in his bid, Microsoft would see a 3x return on its $13 billion investment in the company in less than 12 months.
News of Microsoft Corp. MSFT backed AI giant OpenAI seeking a valuation of up to $90 billion has sparked a series of hilarious replies on X (formerly Twitter), with some users saying Elon Musk needs to short it.
What Happened: AI is the latest Silicon Valley buzzword, and Sam Altman-led OpenAI wants to make the most of it while it can. The AI firm is seeking up to $90 billion in valuation, nearly three times higher since April this year.
If OpenAI manages to hit the $90 billion valuation mark, it would be amongst the most valuable startups in the world, only behind Elon Musk's Tesla Inc. TSLA and TikTok parent ByteDance Ltd.
While the news has barely moved the needle for the Microsoft stock – the company owns a 49% stake in OpenAI and has invested nearly $13 billion so far – users on X are mocking the skyrocketing valuation.
Altman said in late August that OpenAI is on track to $1 billion in revenue by the end of 2023. This is no mean feat since a bulk of revenue generation began with the launch of ChatGPT in November last year.
However, the $90 billion valuation is still a staggering ask and 90 times the current earnings.
Genevieve Roch-Decter, a former money manager and CEO of Grit Capital, called this "wild".
"Valuation would be 90x current run-rate revenue. Also, a possible 3x return for Microsoft in less than 12 months," she said.
To this, a user said in jest that Musk needs to short the company (never mind that OpenAI is not a listed company) to get back at Bill Gates, who once had a $500 million short bet on Tesla Inc. TSLA.
Another user agreed with Roch-Decter, calling the valuation "insane".
Several others had similar opinions, calling this "wild", "ridiculous", and some even quipped that "throwing money at AI has peaked", suggesting that the current AI hype is a bubble and its time to burst is near.
Why This Matters: Since launching ChatGPT in November last year, OpenAI has made several improvements. This includes launching the premium GPT-4 service and adding new capabilities like voice and image support, apart from the ability to access the internet as well.
OpenAI's progress has also stumbled key Microsoft rival Alphabet Inc.'s GOOG GOOGL Google, which has been working on its own AI technologies for several years now. Google did not have an AI chatbot of its own until recently when it rolled out Bard in a limited beta.
Google is currently working on Gemini, its answer to GPT-4. Meta Platforms Inc. META is planning to release Llama 2, its own large-language model, later this year.
For now, though, OpenAI is in the driver's seat, and the Altman-led company is trying to make the most of it.
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