Exploding valuations and mountains of debt co-exist with a US government shutdown. How long can we stay on the hype-cycle rollercoaster?

In an employee share sell-off this week, OpenAI achieved a nominal value of $500 billion. In terms of valuation, the posterchild of GenAI — which is yet to make a profit — left in its dust companies like Toyota, the world's largest automaker.

To put this in perspective, Toyota [PDF] sells around 10.8 million vehicles per year, accrues an operating income (profit before tax) of around $32 billion and has a market cap of a mere $250 billion.

If this continues, it's not hard to imagine OpenAI might be worth double Toyota's value. Welcome to the world of the AI boom, where gravity-defying feats are possible so long as enough people believe they are.

There are certainly enough believers out there. GPU rental business CoreWeave told US financial regulators [PDF] on Thursday it had added an incremental $3 billion tranche of delayed draw term loans to buy certain equipment, hardware, infrastructure, and other systems.

In August, CFO Nitin Agrawal said the company had taken on a total of over $25 billion worth of debt and equity since the start of last year, all to fund the building of its AI cloud infrastructure.

The leverage of CoreWeave is a drop in the ocean of money need to make AI believers' dreams come true. Last week, management consulting firm Bain & Company predicted that funding the necessary infrastructure, would require the generation of $2 trillion in revenue by 2030.

...read more at theregister.com

~AI