| ▲ | alyxya 7 hours ago |
| > Today, we closed our latest funding round with $122 billion in committed capital at a post money valuation of $852 billion. A couple things that stand out to me about this is the use of the phrase "committed capital", which only sounds like a promise that could break from various circumstances, and the valuation of their funding keeps changing so it sounds like a max rather than the valuation every investor invested at. |
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| ▲ | strongpigeon 7 hours ago | parent | next [-] |
| I do wonder how much of Amazon's $50B share (per last press release) is in AWS credits rather than money in the bank. |
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| ▲ | cmiles8 6 hours ago | parent | next [-] | | To then claim that Trainium is “selling” and not a dud? I’d bet a lot. | |
| ▲ | dheera 6 hours ago | parent | prev [-] | | Probably a lot? It would be much more tax-advantageous to do it this way, $50B worth of credits != $50B worth of spend on Amazon's part, and they might meet in the middle about how much equity that translates to. | | |
| ▲ | HWR_14 5 hours ago | parent [-] | | I can see a lot of advantages for Amazon, but I don't see why it would be tax-advantageous. | | |
| ▲ | qurren 5 hours ago | parent [-] | | Situation A: You're Amazon. You give OpenAI $50B cash investment, they then hand you back the $50B over time because they buy $50B worth of Amazon AWS services (they would use AWS or other equivalent compute anyway). OpenAI pays an additional $1-5B in sales taxes on top of their $50B compute purchase. Now let's say you have $25B opex for said compute. You then have $25B profits, you pay 21% corporate taxes on the profits, so you too owe the government about $5B. Government collects around $6-10B on this whole transaction. Situation B: You're Amazon. You let OpenAI use your services by handing them API credentials that unlock what would normally cost $50B worth of services, but no money changes hands. You have zero revenue from the transaction, write off the $25B opex as a tax loss on your other profits elsewhere in the company. You thus pay ~$5B less tax on your other income as a company, and OpenAI also doesn't have to pay sales tax because they didn't actually purchase anything. | | |
| ▲ | HWR_14 3 hours ago | parent [-] | | You have to report barter transactions as income. And Amazon already pays 0% corporate income tax. |
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| ▲ | snoren 7 hours ago | parent | prev | next [-] |
| good catch! committed capital is not same as we raised. |
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| ▲ | Aurornis 6 hours ago | parent | prev | next [-] |
| That’s typical. Large funding rounds usually aren’t delivered as one single giant lump sum into the bank account. The capital is committed in stages that can depend on hitting milestones or goals. This is done even in smaller startup funding rounds some times. |
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| ▲ | whiplash451 6 hours ago | parent | prev | next [-] |
| It makes sense for such a huge amount to be "committed", not sitting idle in a bank somewhere. |
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| ▲ | ta988 7 hours ago | parent | prev [-] |
| that's why they have to open through banks and other less valuable more sliced share system. |
