> your whole argument is that OpenAI is in a bubble because their bet on more compute won't payoff, but it's paying off now

I’m saying OpenAI are levered. If they’re levered and overvalued, they’re a bubble. If they aren’t overvalued, which is to say if they can beat their 2.3x target, i.e. $60+ billion in ARR, they played it savvily.

> But Anthropic is not in a bubble, despite being valued the same as OpenAI, because they were more careful with compute

Anthropic were more careful with debt and debt-like obligations.

> what do you think OpenAI should be valued at if they're in a bubble now?

You’re still conflating orthogonal points.

I think AI should be valued around a growth-adjusted revenue multiple [1] of 4 to 7x. (For context, tech was 2-4x 2015 to 2017, 4-7x 2018-2019, 6.7x in 2021, 3x in 2023, and has now settled back to around 5x for most companies.)

Using $30bn ARR for Anthropic (300% growth) and $25bn for OpenAI (130% growth), both based on the companies’ own projections—Anthropic’s 1,400% growth YoY makes historical figures a bit silly—we get $360 to $630bn for Anthropic and $130bn to $230bn for OpenAI.

I’d put a wide error bar on those figures. Which means I can’t reject their current valuations. Which is why I’m not arguing about who is and isn’t overvalued. The critical observation is Anthropic at $360bn is bruised but survives. OpenAI, even at $230bn and potentially much higher, is basically bankrupt. That is the difference between being overvalued and bubbled.

[1] PEG, but E is R