Not saying it is a bubble but something seems imbalanced here.
The sophisticated investors are not betting on future increasing valuations based on current LLMs or the next incremental iterations of it. That's a "static" perspective based on what outsiders currently see as a specific product or tech stack.
Instead, you have to believe in a "dynamic" landscape where OpenAI the organization of employees can build future groundbreaking models that are not LLMs but other AI architectures and products entirely. The so-called "moat" in this thinking would be the "OpenAI team to keep inventing new ideas beyond LLM". The moat is not the LLM itself.
Yes, if everyone focuses LLMs, it does look like Meta's free Llama models will render OpenAI worthless. (E.g. famous memo : https://www.google.com/search?q=We+have+no+Moat%2C+and+Neith...)
As an analogy, imagine that in the 1980s, Microsoft's IPO and valuation looks irrational since "writing programming code on the Intel x86 stack" is not a big secret. That stock analysis would then logically continue saying "Anybody can write x86 software such as Lotus, Borland, etc." But the lesson learned was that the moat was never the "Intel x86 stack"; the moat was really the whole Microsoft team.
That said, if OpenAI doesn't have any future amazing ideas, their valuation will crash.
Im 42 though and already feeling old to understand the future lol
Writing a new DOS (or Windows 3) from scratch is something a lot of developers could do.
They just couldn't do it legally.
And thus it was easy to bully Compaq and others into only distributing PCs with DOS/Windows installed. For some time you even had to pay the Microsoft fee when you wanted a PC with Linux installed.
It was just the next in line to be inflated after crypto.
It's at least theoretically possible that all the liquidity and leverage in the top of the market could tire itself of chasing the next tulip mania.
For instance, $6 Billion could have gone into climate tech instead of ElizaX.
My problem with these dumb hype cycles is all the other stuff that gets starved in their wake.