Last week was the craziest week in Gen AI history. The biggest headline was about OpenAI raising a massive $6.6B round, setting the company’s valuation at over $150B. While previously, OpenAI has raised far more than $6B, in the history of tech company (private) fundraising, we have not seen this level of valuation. Of course, startups (tech companies) set valuations, and the only way it holds is IF investors are crazy or smart enough to accept the valuation. For the investors to make any profit, the company either has to have an exit well north of $200B OR, go IPO and it better hit about $200B opening day for this all to make sense. In this segment of Did You Know, It Matters Because™, Let’s explore what this means and why it matters.

Did You Know? (DYK)… Not only is this the largest investment into a Gen AI company to date, but Sam Altman, CEO of OpenAI is asking the investors (who had to fight to get a seat at this insane investment table) to agree that they will not invest in similar Gen AI companies. Given that Gen AI is only 2 years old, and at the peak of its growth and potential phase, this will stifle MANY startups from getting funded. The basis for OpenAI’s demand (and given the frenzy and hunger to invest) is that they don’t want to give competitive information away.  Let’s remember: OpenAI started as an open-source AI company, got funding, and then became a giant. OpenAI is asking the largest VCs in the world NOT to invest in any company similar to OpenAI. But wait, Isn’t that almost any company? This is unenforceable and has effectively created a monopoly. Also, $6.6B takes away many other investment opportunities in this space. The valuation has been achieved due to duress by desperate investors, who have put in money, at insane valuations in the worst VC year in decades. All seems rather short-sighted and desperate.

It Matters Because (IMB)… Let’s think carefully about how much of Gen AI is open source. Do we want one company to yield such power? This is a monopoly formed not because at this early stage OpenAI deserves all these rights. Rather, it is ceasing on the desperation of the giant VCs and is driving the monopoly. Do we want just ONE Gen AI company? At a valuation of $156B, OpenAI (in 2 years) is expected to be astronomically larger than any other company. Do we want one company to suck the oxygen out of all other innovations and startups? This artificial valuation and hyper-funding means that OpenAI will be recruiting/bribing the limited super talent we have in the world to all go to one company. We are already seeing this happen in universities, etc. I am excited, as giants like META and Mark Z. not only have phenom Gen AI products and are extremely (if not more) competitive to OpenAI, they also have very deep pockets to invest and disrupt this monopoly that OpenAI is creating. Llama is awesome and evolving super rapidly.

Back with you soon on the next segment of DYK™!!