I get that this example is simplified, but doesn’t the maths here change drastically when the 5% changes by even a few percentage points? The error bars on Openais chance of succes are obviously huge, so why would this be attractive to accountants?
That's why you have armies of accountants rating stuff like this all day long. I'm sure they could show you a highly detailed risk analysis. You also don't count on any specific deal working, you count on the overall statistics being in your favour. That's literally how venture capital works.
(I think) I get how venture capital works, my point is that the bullish story for openAI has them literally restructuring the global economy. It seems strange to me that people are making bets with relatively slim profit margins (an average of 500m on a 10b investment in your example) on such volatile and unpredictable events.
What if your 10B investment encourages others to invest 50B and much of that makes it back to you indirectly via selling more of your core business?
I may be way off, but to me it seems like the AI bubble is largely a way to siphon money from institutional investors to the tech industry (and try to get away with it by proxying the investments) based on a volatile and unpredictable promise?
AI has a lot lower bar to clear to upend the tech industry compared to the global economy. Not being in on AI is an existential risk for these companies.
The existential risk is in companies smoking the AI crackpipe that sama (begging your pardon) handed them, thinking it feels great and then projecting[1] that every investment will hit like the first, and continuing to buy the <EXPLETIVE> crack that they can't afford, and they investors can't afford, and their clients can't afford, their vendors can't afford, the grid can't afford, the planet can't afford, the American people can't afford, and sama[2] can't afford, _because it's <EXPLETIVE> crack_!
The wise will shut up and take the win on the slop com bubble.
This reminds me of the scene in Margin Call [1] when the analyst discovers that their assumptions for the risk of highly leveraged positions are inaccurate.
I'm pretty the armies of accountants would have rated it higher if the cashflow was positive than negative. Negative can't be good even while accounting for taxes.
