Milk Road AI(@MilkRoadAI):AI's two biggest frontier labs just saw $650 BILLION wiped off their proposed valuations, and I actually think this is a GOOD thing. Anthropic was previously expected to go public at around a $2 trillion valuation, but investors are now discussing something closer to $1.5 trillion. That's a $500 billion reduction, or 25%. Meanwhile, OpenAI was initially targeting a $1.4 trillion valuation for its latest funding round, but that number has now dropped to $1.25 trillion, another $150 billion reduction. I've said this before, but I think frontier AI labs are way too expensive right now. I'm extremely bullish on AI and believe we're going through one of the greatest technological transformations in human history. But that doesn't mean every company developing these models deserves a trillion dollar valuation. These businesses are growing incredibly fast, but they're also spending enormous amounts of money on compute, infrastructure, talent, and training increasingly sophisticated models. Competition is intensifying and investors are starting to question how much of that revenue will eventually translate into sustainable profits. And I think that's a healthy development. For the longest time, investors were willing to throw money at practically anything associated with AI without seriously questioning valuations. Now we're finally seeing some discipline return. Lower valuations don't mean AI demand is disappearing. They mean investors are becoming more selective about what they're willing to pay for future growth. I actually think this is GOOD for the long-term health of the AI industry. We need capital flowing toward companies that can generate real returns, not just companies with the biggest growth projections. I'm still incredibly bullish on AI infrastructure, particularly memory, photonics, semiconductors, and power. Those are the areas where I continue to see some of the most interesting opportunities. AI can completely change the world while some of today's biggest AI companies still turn out to be overpriced. Both things can be true.

2026.10.23 17:30

AI's two biggest frontier labs just saw $650 BILLION wiped off their proposed valuations, and I actually think this is a GOOD thing. Anthropic was previously expected to go public at around a $2 trillion valuation, but investors are now discussing something closer to $1.5 trillion. That's a $500 billion reduction, or 25%. Meanwhile, OpenAI was initially targeting a $1.4 trillion valuation for its latest funding round, but that number has now dropped to $1.25 trillion, another $150 billion reduction. I've said this before, but I think frontier AI labs are way too expensive right now. I'm extremely bullish on AI and believe we're going through one of the greatest technological transformations in human history. But that doesn't mean every company developing these models deserves a trillion dollar valuation. These businesses are growing incredibly fast, but they're also spending enormous amounts of money on compute, infrastructure, talent, and training increasingly sophisticated models. Competition is intensifying and investors are starting to question how much of that revenue will eventually translate into sustainable profits. And I think that's a healthy development. For the longest time, investors were willing to throw money at practically anything associated with AI without seriously questioning valuations. Now we're finally seeing some discipline return. Lower valuations don't mean AI demand is disappearing. They mean investors are becoming more selective about what they're willing to pay for future growth. I actually think this is GOOD for the long-term health of the AI industry. We need capital flowing toward companies that can generate real returns, not just companies with the biggest growth projections. I'm still incredibly bullish on AI infrastructure, particularly memory, photonics, semiconductors, and power. Those are the areas where I continue to see some of the most interesting opportunities. AI can completely change the world while some of today's biggest AI companies still turn out to be overpriced. Both things can be true.

Melvin@MelvinInvests

2026.10.20 14:47

OpenAI is starting to get NERVOUS about Anthropic's upcoming IPO. OpenAI is reportedly looking to raise another $30B at a staggering $1.4T valuation, and I don't think the timing is a coincidence. Anthropic has reportedly been targeting a valuation as high as $2T, and if it manages to go public anywhere near those levels, we're talking about one of the largest IPOs in history. That could attract an ENORMOUS amount of institutional capital, especially from investors looking for direct exposure to the AI model race. There is only so much liquidity available in the market at any given time. If Anthropic gets to the public markets first and starts absorbing tens of billions of dollars in investor capital, OpenAI could find itself competing for that same pool of money, potentially at a much less favorable valuation. And here's another huge risk. If Anthropic's IPO ends up flopping, whether that's weak investor demand, disappointing pricing or the stock collapsing after going public, it could have serious implications for OpenAI as well. Investors could start questioning the valuations being assigned to these AI companies, making it significantly harder for OpenAI to justify a $1.4T valuation or raise capital on favorable terms. This is why I think OpenAI has EVERY incentive to secure as much capital as possible before Anthropic makes its move. Not only does it strengthen OpenAI's balance sheet but it also gives the company more financial flexibility to continue investing in compute, infrastructure, talent, and model development while securing a massive valuation benchmark ahead of a potential IPO. And remember, these companies are competing for more than just customers. They're competing for GPUs, data centers, electricity, engineering talent, and increasingly, investor capital. I wouldn't be surprised if we see both companies become much more aggressive with fundraising over the coming months. This is turning into an absolute capital arms race, and whoever can secure the most funding on the best terms could have a major advantage as the AI industry continues scaling.

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