I think this is a pretty reasonable goal. I also listened to that podcast interview, and although I certainly don’t think they are near an AGI right now, it may have some missing pieces that other projects don’t, particularly in regards to explaining AI actions in a human-intelligible fashion.
I don’t think open-sourcing would require a buy-out. The plethora of companies built around open-source code bases shows that one can have an open-sourced code base, and still be profitable.
Gwern, what makes you pick a 5x multiplier?
The average P/E ratio for the S&P 500 is around 30 right now. I would expect that a firm like Cyc may be worth a bit more, since it is a moonshot project.
If their revenue is 5 million, I would expect the company value is roughly 150 million, based on that back of the napkin math.
How much they would charge to open source, however, could be drastically less than that, and maybe in single digit numbers.
(In a P/E ratio, the “earnings” is profit, which in Cyc’s case is probably negative. Gwern is using a P/S ratio, price to sales where sales=revenue, since these are usually used for startups since they’re scaling and earnings are still negative. 5 seems reasonable because, while P/S can go much higher for startups rapidly scaling, Cyc doesn’t seem to be rapidly scaling.)
I thought I was being generous by applying what several articles/blog posts told me was a fairly typical multiplier for small private businesses: I can’t think offhand of an ‘AI startup’ (are you still a ‘startup’ if you are 26 years old and going nowhere fast?) I’d rather own less than a big knowledge base and inference engine dating from the ’80s. In any case, if you believe the multiplier should be much bigger than 5x, then that makes buying look all the worse.
I think this is a pretty reasonable goal. I also listened to that podcast interview, and although I certainly don’t think they are near an AGI right now, it may have some missing pieces that other projects don’t, particularly in regards to explaining AI actions in a human-intelligible fashion.
I don’t think open-sourcing would require a buy-out. The plethora of companies built around open-source code bases shows that one can have an open-sourced code base, and still be profitable.
Gwern, what makes you pick a 5x multiplier?
The average P/E ratio for the S&P 500 is around 30 right now. I would expect that a firm like Cyc may be worth a bit more, since it is a moonshot project.
If their revenue is 5 million, I would expect the company value is roughly 150 million, based on that back of the napkin math.
How much they would charge to open source, however, could be drastically less than that, and maybe in single digit numbers.
(In a P/E ratio, the “earnings” is profit, which in Cyc’s case is probably negative. Gwern is using a P/S ratio, price to sales where sales=revenue, since these are usually used for startups since they’re scaling and earnings are still negative. 5 seems reasonable because, while P/S can go much higher for startups rapidly scaling, Cyc doesn’t seem to be rapidly scaling.)
I thought I was being generous by applying what several articles/blog posts told me was a fairly typical multiplier for small private businesses: I can’t think offhand of an ‘AI startup’ (are you still a ‘startup’ if you are 26 years old and going nowhere fast?) I’d rather own less than a big knowledge base and inference engine dating from the ’80s. In any case, if you believe the multiplier should be much bigger than 5x, then that makes buying look all the worse.