OpenAI and Anthropic are both seeking trillion IPOs, while Chinese labs are pumping out open-weight models that are free for US providers to host and monetize.

These Chinese models cost less of US SOTA models to run, even if they are less capable. Providers can just run them, offer cheap tokens, and pocket the margin.

I just don't see how you justify a trillion valuation for US AI labs when the underlying models are being commoditized this fast.

This is going to be catastrophic.

Whether AI works or use useful or not isn’t even the question anymore. It can fulfil every promise Sam Altman has been making and will still make no financial sense to justify these valuations.

Most are not necessarily free to host and monetize. At least one of them has a license that says if you are re-hosting the model then you need a license with that company that made the model.

Another interesting potential market here will be 'LLM in a box'. All the hardware and other tooling in a prebuilt, but modular, package ready to go. Pay one up-front cost, get a system running [whatever open LLM] with a token rate of [x], optionally configured to be immediately ready for distributed usage. Basically the opposite of cloud stuff: no rent, no dependency, 100% guaranteed uptime, guaranteed security/privacy (at least subject to your own actions), and so on.

There could be soon AI safety regulations that will stop the US to host or use the Chinese models.

US investors are desperate for the next hypergrowth opportunity. From what I can tell the US economic strategy is to outgrow its debt.

I think at this point the question is: will the US government be willing and capable to justify the trillion dollar valuation for _one_ of the companies via regulatory capture? The US has a workforce of 170m, so 1.7 trillion would come down to 10k per person, or a discounted cashflow at 3% of 25 USD per month - not including private use, students etc.

> Providers can just run them, offer cheap tokens, and pocket the margin.

There’s an assumption that you can spin up the infra and acquire customers within that margin

It is impossible to justify the absurd private valuations they have given themselves in collusion with investors.

I wish they had tried to IPO because then we’d see the judgement of the market on this. But that’s why they didn’t this year. How long can they keep up the charade that their models are uniquely valuable and on the path to AGI?

I think that explains the race for IPO by the US AI labs, they know that the longer they wait, the less they will be worth.

"I just don't see how you justify a trillion valuation for US AI"

- military applications - financial applications - medical - applied science

In all those cases it is achievable for those who have needed training data, and Chinese are not going to get them easily. US AI Labs are showing: give us the data, we will do wonders, promising "singularity"-level future achievements.

Hmm.. how you justify?

Provoking war, this is how the empire "defends" itself, usually.

I just hope that this time it will get stuck in your throat.

Ok

I suggest you think why OpenAI was worth billions before ChatGPT. The valuation is not about how the current set of models can be monetized.