Bill Gurley

And, you know, you asked me the question, I think, Bill, just around kind of valuation, right? How did we think about valuation? The first thing I would say is market leaders never look cheap.

And, you know, you asked me the question, I think, Bill, just around kind of valuation, right? How did we think about valuation? The first thing I would say is market leaders never look cheap.

And, you know, you asked me the question, I think, Bill, just around kind of valuation, right? How did we think about valuation? The first thing I would say is market leaders never look cheap.

When I invested in Google in 2005, when I invested in, you know, Meta, when the IPO broke and we looked at those late stage private rounds, I certainly remember the Microsoft round in a Meta at $15 billion that was roundly criticized as being incredibly expensive. None of these things, you're certainly not going to buy a market leader on the cheap.

When I invested in Google in 2005, when I invested in, you know, Meta, when the IPO broke and we looked at those late stage private rounds, I certainly remember the Microsoft round in a Meta at $15 billion that was roundly criticized as being incredibly expensive. None of these things, you're certainly not going to buy a market leader on the cheap.

When I invested in Google in 2005, when I invested in, you know, Meta, when the IPO broke and we looked at those late stage private rounds, I certainly remember the Microsoft round in a Meta at $15 billion that was roundly criticized as being incredibly expensive. None of these things, you're certainly not going to buy a market leader on the cheap.

But if you really look at this, I think that they've said publicly they expect their revenues this year to be around $13 billion, right? To do $13 billion in revenue, it probably means you have to exit the year closer to $15 to $18 billion in run rate revenue. So as I look at this on a forward run rate for this year, you're paying something like, you know, 20 times revenue for the business, okay?

But if you really look at this, I think that they've said publicly they expect their revenues this year to be around $13 billion, right? To do $13 billion in revenue, it probably means you have to exit the year closer to $15 to $18 billion in run rate revenue. So as I look at this on a forward run rate for this year, you're paying something like, you know, 20 times revenue for the business, okay?

But if you really look at this, I think that they've said publicly they expect their revenues this year to be around $13 billion, right? To do $13 billion in revenue, it probably means you have to exit the year closer to $15 to $18 billion in run rate revenue. So as I look at this on a forward run rate for this year, you're paying something like, you know, 20 times revenue for the business, okay?

Now, we also had a couple other announcements this week. There's the Anthropic funding round, and there's talk that they're doing a billion to $2 billion in revenue, a $60 billion funding round. So that, to me, looks like something like 50 times revenue. So again, you've got OpenAI at 20 times, Anthropic at 50 times. And then we had the merger of X and X.AI. Correct.

Now, we also had a couple other announcements this week. There's the Anthropic funding round, and there's talk that they're doing a billion to $2 billion in revenue, a $60 billion funding round. So that, to me, looks like something like 50 times revenue. So again, you've got OpenAI at 20 times, Anthropic at 50 times. And then we had the merger of X and X.AI. Correct.

Now, we also had a couple other announcements this week. There's the Anthropic funding round, and there's talk that they're doing a billion to $2 billion in revenue, a $60 billion funding round. So that, to me, looks like something like 50 times revenue. So again, you've got OpenAI at 20 times, Anthropic at 50 times. And then we had the merger of X and X.AI. Correct.

which are rumored to have around, let's call it 3 billion in revenue. And the combined market cap there is like 125 billion. So that looks like closer to 80 times revenue. So the market leader here, which usually trades at a premium, not at a discount, To me, again, we can argue about the sustainability and could somebody disrupt them? And is 20 times a good valuation in this environment?

which are rumored to have around, let's call it 3 billion in revenue. And the combined market cap there is like 125 billion. So that looks like closer to 80 times revenue. So the market leader here, which usually trades at a premium, not at a discount, To me, again, we can argue about the sustainability and could somebody disrupt them? And is 20 times a good valuation in this environment?

which are rumored to have around, let's call it 3 billion in revenue. And the combined market cap there is like 125 billion. So that looks like closer to 80 times revenue. So the market leader here, which usually trades at a premium, not at a discount, To me, again, we can argue about the sustainability and could somebody disrupt them? And is 20 times a good valuation in this environment?

And yeah, but aren't they spending a lot of money on compute? And is it really high value revenue? But apples for apples relative to their peers, it certainly appears to me like 20 versus 50 versus 80. It's hard to say that this would be more expensive on a multiple basis than Anthropic or X.ai.

And yeah, but aren't they spending a lot of money on compute? And is it really high value revenue? But apples for apples relative to their peers, it certainly appears to me like 20 versus 50 versus 80. It's hard to say that this would be more expensive on a multiple basis than Anthropic or X.ai.

And yeah, but aren't they spending a lot of money on compute? And is it really high value revenue? But apples for apples relative to their peers, it certainly appears to me like 20 versus 50 versus 80. It's hard to say that this would be more expensive on a multiple basis than Anthropic or X.ai.

Right. Listen, I think the analogy is a fair one, Bill. And obviously, Masa was involved in the Uber-Lyft battle. So it's an easy one, particularly with his involvement here, to say you've referred to it before as weapons of economic destruction, all of this capital. But I would remind you, there was a moment in time in 2020 where the headlines were that Uber would never be profitable.

Right. Listen, I think the analogy is a fair one, Bill. And obviously, Masa was involved in the Uber-Lyft battle. So it's an easy one, particularly with his involvement here, to say you've referred to it before as weapons of economic destruction, all of this capital. But I would remind you, there was a moment in time in 2020 where the headlines were that Uber would never be profitable.