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0 pointstoomuchtodo1y ago0 comments

> "they destroyed $1T of shareholder value." (By revealing that Microsoft et al. paid way too much to OpenAI et al. for technology that was actually easy to reinvent.)

The value was highly speculative, an illusion created by PR and sentiment momentum. "Hype value" not real value (unless you're able to realize it and dump those bags on someone else before fundamentals set in). Same thing happening with power companies downstream of the discovery that AI is not going to be a savior of sagging electricity demand. Overdriving the fundamentals is not value destruction, it is "I gambled and lost."

https://www.bloomberg.com/news/articles/2025-01-28/deepseek-... | https://archive.today/mCemf

"In the short run, the market is a voting machine but in the long run, it is a weighing machine."

0 comments

DebtDeflation1y ago

What they really destroyed was the idea that OpenAI would be able to charge $200/month for their ChatGPT Pro subscription which includes o1. That was always ridiculous IMO. The Free tier and $20/month Plus tier along with their API business (minus any future plan to charge a ridiculous amount for API access to o1) will be fine.

toomuchtodoOP1y ago

> The Free tier and $20/month Plus tier along with their API business (minus any future plan to charge a ridiculous amount for API access to o1) will be fine.

Do the unit economics make this sustainable?

DebtDeflation1y ago

If only there were a way to make the models more efficient. Oh wait.

jl61y ago

But doesn’t Deepseek’s innovation apply only to training, not inference?

3 more replies

scarface_741y ago

The two podcasters who do the Acquired podcast spoke to Ballmer about some of Microsoft’s failed initiatives and acquisitions. He told them that at the end of the day “it’s only money”.

All of the BigTech companies have enough cash flow from profitable lines of business to make speculative bets.

azemetre1y ago

It must be EZ mode to be a big tech executive, you somehow have all the power to make every decision while also having the ability to never take the fault for these decisions.

scarface_741y ago

I would much rather have a company with a culture that isn’t afraid to take calculated risks and not be afraid of repercussions when they take risk as long as it doesn’t cause consumer harm.

azemetre1y ago

"Not doing consumer harm" is carrying a lot of weight there.

Either way what you describe is perfectly achievable for the workers, but at some point management needs to own up to their failures and getting rewarded because the board is also made up of executives at other big tech companies is a perverse incentive to never actually improve.

1 more reply

cft1y ago

Since the time when companies en masse stopped paying cash dividends on owned shares, the value has become highly speculative. In the absence of dividend payments, the stock pricing mechanism is not essentially different from Solana or Ethereum "price" discovery.

toomuchtodoOP1y ago

I don't disagree that price discovery is harder, but I can with more certainty give an honest valuation of CLF or DOW vs OpenAI's "who knows what money will look like after we succeed, you should view your investment as a donation" nonsense. Speculation is inevitable when forward looking, but there is a difference between error bars and various projections vs unicorns.

Due diligence never goes out of style.

JumpCrisscross1y ago

> when companies en masse stopped paying stock dividends

Do you mean cash dividends [1]?

Also, the premise is false. Dividend yields have roughly tracked interest rates [2]. (The difference is a dirty component of the equity risk premium [3].)

[1] https://www.investopedia.com/ask/answers/05/stockcashdividen...

[2] https://www.multpl.com/s-p-500-dividend-yield/table/by-year

[3] https://www.investopedia.com/investing/calculating-equity-ri...

cft1y ago

I changed the typo, thanks. Chash dividends. This analysis does not negate common sense: when a company does not pay cash dividends, owning its stock is purely speculative, like owning Solana. When it does, you get cash dividends funded by the company's tangible revenue, proportional to your number of shares.

j / k navigate · click thread line to collapse

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DebtDeflation1y ago

toomuchtodoOP1y ago

> The Free tier and $20/month Plus tier along with their API business (minus any future plan to charge a ridiculous amount for API access to o1) will be fine.

Do the unit economics make this sustainable?

DebtDeflation1y ago

If only there were a way to make the models more efficient. Oh wait.

jl61y ago

But doesn’t Deepseek’s innovation apply only to training, not inference?

3 more replies

scarface_741y ago

The two podcasters who do the Acquired podcast spoke to Ballmer about some of Microsoft’s failed initiatives and acquisitions. He told them that at the end of the day “it’s only money”.

All of the BigTech companies have enough cash flow from profitable lines of business to make speculative bets.

azemetre1y ago

It must be EZ mode to be a big tech executive, you somehow have all the power to make every decision while also having the ability to never take the fault for these decisions.

scarface_741y ago

I would much rather have a company with a culture that isn’t afraid to take calculated risks and not be afraid of repercussions when they take risk as long as it doesn’t cause consumer harm.

azemetre1y ago

"Not doing consumer harm" is carrying a lot of weight there.

1 more reply

cft1y ago

toomuchtodoOP1y ago

Due diligence never goes out of style.

JumpCrisscross1y ago

> when companies en masse stopped paying stock dividends

Do you mean cash dividends [1]?

Also, the premise is false. Dividend yields have roughly tracked interest rates [2]. (The difference is a dirty component of the equity risk premium [3].)

[1] https://www.investopedia.com/ask/answers/05/stockcashdividen...

[2] https://www.multpl.com/s-p-500-dividend-yield/table/by-year

[3] https://www.investopedia.com/investing/calculating-equity-ri...

cft1y ago

j / k navigate · click thread line to collapse