Are frontier AI lab valuations too high, or is there much more upside from here?

Vince Hankes · May 3, 2023

It is better to bet on the compounding upside of OpenAI's scalability than to sit on the sidelines, because once the outcome is clear the company will get priced up very quickly

The scalability properties of what OpenAI has built are so good that waiting for clarity means paying far more

32:42 20VC: The OpenAI Memo: Why Invest? Is it too Late to Catch OpenAI? Are OpenAI's Models Truly Defensible? Does the Value in AI Accrue to Incumbemts or Startups - Application Layer/Infrastructure? What Happens with Regulation? with Vince Hankes @ Thrive

Zachary Bookman · Dec 6, 2024

Investing in OpenAI at $150BN is a nice bet: roughly 60% chance it becomes a world-changing trillion dollar company, 20% chance it goes sideways and you recover most of your money via the pref stack, 20% chance of a total loss

The upside case dominates the distribution of outcomes even with a real chance of zero

Scope: Meeker said she is not in the round; Bookman doesn't remember the numbers exactly

55:31 20VC: From Unsexy Startup to $1.8BN Acquisition | Why VCs and Founders are Fundamentally Misaligned | Why Valuations and Fundraising are BS | Lessons from Josh Kushner and Marc Andreesen | Zac Bookman, OpenGov

Tom Hulme · Apr 10, 2025

Buying OpenAI at a $300B valuation is a reasonable investment

As a consumer business it has extraordinary momentum and is only now building moats — switching costs via memory, and generational brand capture where ChatGPT is synonymous with LLMs — while at a $12B run rate roughly 20x forward with downside somewhat protected

Scope: doesn't believe it's the best Gen AI investment available; assumes downside is somewhat protected

74:48 20VC: How to Fix the UK Tech Ecosystem | Why We Need to Flood the UK with Venture Capital | What the UK Can Learn From Sequoia, Stripe and Norway | Why Now is the Time to be Bullish on China & Lessons from Jensen Huang with Tom Hulme & Stan Boland

Harry Stebbings · Apr 10, 2025

He would buy OpenAI at its current valuation

He likes businesses everyone thinks are topping out when they are actually reaching escape velocity, and the introduction of moats and memory is important

76:20 20VC: How to Fix the UK Tech Ecosystem | Why We Need to Flood the UK with Venture Capital | What the UK Can Learn From Sequoia, Stripe and Norway | Why Now is the Time to be Bullish on China & Lessons from Jensen Huang with Tom Hulme & Stan Boland

Victor Lazarte · Apr 14, 2025 · hedged

On average, buying today's winners will work out

Implied by the scale of value being created in the current AI cycle

Scope: on average

0:00 20VC: Benchmark's Victor Lazarte on Why Portfolio Construction is BS| Why SaaS Spreadsheet Investing is Dead | Why China is a Stabilising Force for the US | Three Traits All the Best Founders Have & The Lie All Big Tech Companies Have Been Telling

Victor Lazarte · Apr 14, 2025

Buying the winners at today's AI prices will work out on average

AI companies are attacking a ~$10T labor spend rather than the ~$1T software spend, so outcomes will be far larger than before, and the set of early winners is small

Scope: on average across a basket of winners; some individual winners will look overpriced in retrospect

33:26 20VC: Benchmark's Victor Lazarte on Why Portfolio Construction is BS| Why SaaS Spreadsheet Investing is Dead | Why China is a Stabilising Force for the US | Three Traits All the Best Founders Have & The Lie All Big Tech Companies Have Been Telling

Harry Stebbings · May 5, 2025

OpenAI will unwaveringly become a $2 trillion company, reversing his doubt of a year ago about its long-term sustainability and enterprise value

49:28 20VC Exclusive: Why Mega Platforms Will Win in VC | Why You Cannot Do VC If You Do Not Do Pre-Seed | Why Market Sizing is BS | Where Will Foundation Models Build/Buy Apps vs Where Will They Not with Bucky Moore

Hemant Taneja · Sep 22, 2025

Anthropic could be 10-20x bigger from here and is well priced even at its current valuation.

The market is effectively endless — roughly $500BN of developer payroll and perhaps $10TN of white collar work — and Anthropic is naturally positioned as one of only two or three players to capture it.

Scope: conditional on the business staying on trajectory; growth investing still requires focus on economics, margins and profitability

34:21 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Jonathan Ross · Sep 29, 2025

Both OpenAI at $500B and Anthropic at $180B are highly undervalued

Framing them as competing for a finite market is wrong — their R&D increases the size of the market itself

59:55 20VC: OpenAI and Anthropic Will Build Their Own Chips | NVIDIA Will Be Worth $10TRN | How to Solve the Energy Required for AI... Nuclear | Why China is Behind the US in the Race for AGI with Jonathan Ross, Groq Founder

Harry Stebbings · Oct 17, 2025

OpenAI will be worth over $3 trillion within five years.

Scope: over/under game framing

43:01 20VC: The Startup Adding $1M ARR Every Week | Competing Against OpenAI's Codex and Claude Code: Who Wins | Why Gemini is Failing and GPT-5 Is Winning | Do Margins Matter in a World of AI | The Ugly Truth About AI Coding with Zach Lloyd, Warp

Everett Randle · Nov 10, 2025 · hedged

OpenAI could raise at a trillion-dollar valuation with no problem by the end of this year or Q2

Scope: timing given as end of year or Q2

16:52 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

Winston Weinberg · Jan 19, 2026

Both Anthropic and OpenAI are worth buying at double their current valuations ($350B and $800B)

25:06 20VC: How Model Performance is Plateauing | Two Key Rules for Effective Deal-Making | Company Building Lessons from Keith Rabois, Brian Halligan and Pat Grady | Why Enterprise AI Adoption is Years Off with Harvey CEO Winston Weinberg

Aaron Levie · Apr 20, 2026 · hedged

Investors should still be loading up on frontier lab rounds because valuations could go much higher from here

The numbers could continue to get much larger

Scope: framed as what he 'would probably' do

0:00 20VC: Everyone is Wrong; We Will Have More Developers in Five Years | Why Frontier Labs Will Be Way More Valuable Than They Are Today | Are SaaS Companies Cooked: Which Thrive & Which Die with Aaron Levie, Founder at Box

Aaron Levie · Apr 20, 2026 · hedged

As a venture investor today he would load up on frontier lab rounds because the valuations could get much larger

46:38 20VC: Everyone is Wrong; We Will Have More Developers in Five Years | Why Frontier Labs Will Be Way More Valuable Than They Are Today | Are SaaS Companies Cooked: Which Thrive & Which Die with Aaron Levie, Founder at Box

Brendan Foody · Jun 1, 2026 · speculative

At least one of OpenAI or Anthropic will be worth more than $10 trillion

The opportunity of holding the frontier model is so large it eats much of the economy's other demand, and the frontier model can be used as a teacher model to distill the best small models

Scope: framed as a guess

50:41 20VC: Mercor CEO on Why Application Layer Companies Have No Defensibility, The Model is the Product | Token Spend Will Exceed Headcount Spend in 5 Years | The True Cost of Hiring AI Researchers in the Valley Today with Brendan Foody

Harry Stebbings · Jun 8, 2026

Frontier labs valued around a trillion dollars are priced to perfection, and perpetually leapfrogging to new problems while open source eats the value behind them is a hard business to sustain

You have to keep finding new valuable problems continuously as your prior value gets commoditized

9:55 20VC: Nebius Co-Founder on AI Infrastructure Bubbles | The Real Impact of Open Source on OpenAI & Anthropic | How Price Elastic is Demand for Compute | Could Nebius Sell 10x More Compute If They Had It & more with Roman Chernin

Arvind Jain · Jul 11, 2026 · hedged

The standalone model business is probably far less lucrative than people believe

Fierce competition even among a three-way race of closed labs creates pricing pressure, and open source is an order of magnitude cheaper; the labs' value now comes from being more than model companies

Scope: labs are no longer only model companies

16:22 20VC: Why OpenAI and Anthropic Won't Win the App Layer | Why Teams Will Get Bigger Not Smaller in a World of AI | Why AI Removes Incumbents Advantage of Bundling | China vs America: Who Wins the AI War with Arvind Jain, Co-Founder @ Glean

Hemant Taneja · Sep 22, 2025

The $60BN Anthropic round was the right round to do risk-adjusted, because it was the first moment these model companies looked like real businesses rather than bets on an abstract AGI goal.

The coding use case that would draw in enterprises and build durable relationships became clear and demonstrably scalable — and it has since scaled.

32:05 Coding use case proof made the 60bn anthropic round justified

Hemant Taneja · Sep 22, 2025

The recent Anthropic round was the cheapest and best-priced round he did all year on a multiples basis — roughly 20x ARR when comparable companies raise at 50-100x ARR at a tenth of the scale.

Relative multiples at far greater scale made it the best price available in that cohort, which is why it was five times oversubscribed.

33:36 Anthropic round priced cheap relative to peers on arr multiple

Hemant Taneja · Sep 22, 2025 · speculative

If Anthropic hits roughly $27B of ARR next year, public-market comps for that growth rate imply it should be worth around $500B by the end of next year

Growing from ~$9B to ~$27B is 200% growth, and the current round prices it at only 20x this year's ARR; applying the same multiple to next year's revenue, with a market large enough to sustain growth beyond that, gets you there

39:45 Public market comps imply 500bn valuation if arr hits 27bn next year

Matt Clifford · Jul 1, 2024 · hedged

He would probably not be a buyer of OpenAI at its current valuation, though if its revenue and productization continue, the valuation may not be unreasonable.

Within the next year there will be much more evidence about whether anyone actually has another good idea, and that is what the value depends on

15:16 Cautious on openai valuation pending evidence of differentiated ideas

Harry Stebbings · Jul 1, 2024

He would not buy OpenAI at $90B because its growth will plateau as competitors build comparable go-to-market capability

OpenAI scaled to $3.5B on the premise of being the best and having superior go-to-market, and both advantages are eroding as others build out GTM teams

15:40 Openai growth plateaus as competitors match its go to market capability

Stan Boland · Apr 10, 2025 · hedged

He would put money elsewhere than OpenAI because the API/agent interface, not the consumer chat interface, is likely to be the winning interface for foundation models

Most demand will come through APIs called by application software and agents, driven by latency and model performance, and rival models like Claude are as good or better than OpenAI's

75:39 Api agent interface not consumer chat will be the winning interface so prefer alternatives to openai

Mitchell Green · Mar 7, 2026

Underwriting entries at $100B+ valuations is extremely hard because at steady state companies trade at ~10x earnings, so a double implies ~$250B and ~$25B of earnings, which very few companies will ever produce

Steady-state multiples revert to roughly 10x earnings and dilution raises the bar further

52:27 Steady state earnings math makes entries above 100b unworkable

Bret Taylor · Oct 2, 2024 · hedged

Valuations for companies pursuing artificial general intelligence might not be irrational, even if they aren't entirely rational either

It is very hard to value a company that would create AGI — the value in a superintelligence or general intelligence platform is so large the numbers may be justified, though the technology already has substantial value in current form

8:48 Agi valuations may not be irrational given superintelligence scale upside

Richard Socher · Apr 18, 2025

He would not invest in OpenAI at $300B, Anthropic at $60B or Grok at $50B because he doesn't see 1000x outcomes from them, unlike early stage

He loves investing where 1000x returns are possible, and those valuations foreclose that

54:40 No thousand x outcome possible at these valuations so avoid frontier lab rounds