Latest / Minds, Bodies, and Terawatts / OpenAI Called an IPO 'Ill-Advised' on Safety Grounds. Three Days Later It Was Fielding Offers at $1.2 Trillion and Asking for $1.5 Trillion, in Private

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OpenAI Called an IPO 'Ill-Advised' on Safety Grounds. Three Days Later It Was Fielding Offers at $1.2 Trillion and Asking for $1.5 Trillion, in Private · Minds, Bodies, and Terawatts

• 0:00
  [Host] This is Minds, Bodies, and Terawatts, the show where the company that hit pause asked for a trillion and a half to keep waiting. The New York Times reported on Wednesday that OpenAI is weighing a new private funding round at about one and a half trillion dollars, which would make it the most valuable private company on Earth.
• 0:20
  [Guest] The investors came to OpenAI first, offering to buy in at one point two trillion. The Times says OpenAI thinks it deserves at least one point five, on the strength of its coding tool and its newest models.
• 0:33
  [Host] Wait, on Saturday Sam Altman told Fortune that, given everything happening with safety, right now would be an ill-advised moment to go public. Days later he's shopping a bigger number?
• 0:43
  [Guest] He isn't selling shares to the public, he's selling them to a handful of the largest investors alive, and the money keeps the company private into next year. We covered this in June, when OpenAI quietly filed its paperwork to go public, and the worry then was what a ticker symbol would do to the mission.
• 1:02
  [Host] So the ticker is off the table. What does a private round buy that a listing wouldn't?
• 1:08
  [Guest] Time and quiet. CNBC says some investors pitched the round partly as a way for employees to sell stock, so insiders get their payday without a listing, and without publishing the numbers every quarter.
• 1:19
  [Host] What are the numbers, as far as anyone outside can see them?
• 1:23
  [Guest] The Times says revenue passed forty billion a year last month, about double where it stood at New Year. The spring round priced the company at seven hundred thirty billion before the new money went in, so one point five would double the price set in the spring.
• 1:40
  [Host] Who gets to say no to that?
• 1:42
  [Guest] Nobody outside the room. Altman told Fortune that OpenAI needs to be able to make decisions that are not obviously in the interest of its business and its shareholders. The catch is that the people writing these checks are shareholders too, just fewer of them.
• 1:57
  [Host] Is the safety talk hurting the price at all?
• 2:00
  [Guest] The opposite, if you believe the money. A Chicago wealth manager told Reuters this week that the buildout doesn't stop because the CEOs asked for guardrails, and that a credible safety framework makes the long, slow spending easier to bet on. In plain words, the promise to slow down is part of the pitch.
• 2:19
  [Host] So the pledge raises the price. Where does that land on someone whose retirement is in an index fund, not in a private round?
• 2:27
  [Guest] You get in last. Every step up taken in private, from the spring price to this one, is marked before the public can buy, and an index fund only holds the stock once it lists. Whoever pays one point five trillion needs it to be worth more by then, so nobody in that room is paying for a company that plans to coast.
• 2:48
  [Host] Meanwhile Anthropic, whose chief executive wrote the essay asking everyone to slow down, is still going public?
• 2:54
  [Guest] Reuters says it starts pitching its shares to investors as soon as next month at about two trillion, and wraps up days before the midterm elections. So both labs that asked the world to slow down are raising the largest sums in corporate history this season, one public, one private.
• 3:11
  [Host] Then what's the difference between public and private, if both end up owned by people who need the number to go up?
• 3:19
  [Guest] Less than it looks. A public owner wants a bigger quarter now; a private owner wants a bigger listing later, because the listing is where private money gets paid out, so the wait can't run forever. The Unscarcity framework's answer to Altman's problem is a company with no number to defend, what it calls a Mission Guild, held by the people who built it as stewards rather than owners, and nobody in this round is offering that.
• 3:45
  [Host] The Times also says the company had already shelved this year's listing to shore up its finances before safety became the stated reason. So which came first, the safety worry or the cash need?
• 3:56
  [Guest] The Times' reporting has the cash first and the safety second. One person in the talks told reporters the new money pushes the listing back a quarter or two, not years. Back then the fear was a ticker symbol; the ticker went away and nothing else did, and the same few investors now set the price without the disclosure a listing would have forced.
• 4:18
  [Host] And the one buyer who isn't a shareholder, the government? On Monday the President called the safety warnings a hoax.
• 4:25
  [Guest] He did, and said the only guardrail AI needs is a strong president. So the only party that could put a price on slowing down that the labs don't set themselves has declined to bid.
• 4:37
  [Host] Then who checks the price?
• 4:39
  [Guest] Right now, the sellers. The way out Patrick Deglon draws in Unscarcity is the Enterprise EXIT: the company trades its cap table, the ledger of who owns it, for stewardship, and a machine nobody owns has nobody who needs it to stay expensive. For more on what happens when the abundance machines go to market, head to unscarcity dot ai. The book is on Amazon, the audiobook is on Spotify. This has been Minds, Bodies, and Terawatts.