OpenAI: Start-up that’s grown up
Well, that didn’t take long. OpenAI’s valuation was limping along at a mere $300bn back in March, but it has just announced a secondary share sale at a far more sprightly $500bn, leapfrogging SpaceX’s $400bn to grab the gold medal for the world’s most valuable start-up.
The sale will allow current and former employees of the group to flog some $6.6bn of their stock, and with the festive season approaching there should be some pretty heavy lifting for Santa and his elves in the greater San Francisco region.
Concerns about whether this might constitute a bubble have been raised by James Anderson (the tech investment guru rather than the legendary England and Lancashire fast-medium bowler), who described the jump in valuations as “disconcerting”.
Even OpenAI CEO Sam Altman mentioned the B-word in August, and Jeff Bezos has chipped in with the good news that while it is a bubble, it’s an industrial bubble rather than a financial bubble, and industrial bubbles are “not nearly as bad”, and you can probably get three for the price of two on Amazon Prime with a postcard of Lauren Sanchez chucked in for nothing.
The good news about having a chequebook as large as OpenAI’s is that when you decide you need to develop a hardware business, for instance, you can go out and poach Jony Ive and his team to do it for you, given that they didn’t exactly mess up with the iPhone.
The plan appears to be to develop a gadget that does what Siri should have done, and does it without being intensely annoying.
LIV Golf: Saudis are well over par
Golf has the reputation of being an expensive sport and it is certainly proving to be pricey, even for the mighty coffers of Saudi Arabia’s Public Investment Fund (PIF).
LIV was established in 2021 as a rival to the entrenched dominance of the US PGA Tour and the European Tour, and the upstart was greeted with voluble harrumphing from the guardians of the game’s hallowed traditions and exacting dress codes. The lawsuits were flying thick and fast, and great sacks full of Saudi petrodollars were needed to persuade golfers to play.
As a result of all this generosity, it hasn’t exactly been a runaway financial success.
LIV Golf’s UK company has burnt through $1.1bn since 2021, and the losses are growing, rising from $395m in 2023 to $461.8m in 2024. Its accounts flagged a material uncertainty over going concern, but it was able to calm things down with a commitment from the PIF and its golf-loving governor, Yasir Al-Rumayyan, to keep the used notes flowing.
LIV has been criticised for being part of Saudi Arabia’s policy of hurling money at various sports to deflect attention from its patchy human rights record.
Its founding CEO, the divisive Australian golf legend Greg Norman, didn’t exactly cover himself in glory when he was asked about the murder and dismemberment of Jamal Khashoggi in the Saudi consulate in Istanbul. His reply: “Look, we’ve all made mistakes”.
LIV tried to land the biggest fish of all in Tiger Woods, but not even an offer reported to be somewhere between $700m and $800m was enough to persuade the great waitress-enthusiast to play.
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