posted in Technology
AI Bubble Teetering on the Brink as OpenAI Admits to Massive Financial Failure: A $20 billion setback.
futurism.com/future-society/ai-financial-bubble-openai-billions-failure
Replying to @eicker@lemmy.world
The $20B difference is based on an accounting fraud. $50B vs $70B is like if GM would count the total of what buyers pay for cars ($70B) instead of their real revenue ($50B) of what their dealers pay them. Monumental fraudster BS came out overnight to resume the bubble frenzy though.
Replying to @humanspiral@lemmy.ca
The number they used for annualized revenue for these rapidly growing companies is taking the most recent month’s revenue and multiplying it by 12. It’s not a guarantee about the future, but it is misleading.
The extreme version is taking a good week’s revenue and multiplying it by 52, or even worse, multiplying a day by 365. Those are outright dishonest. But not accounting fraud, because it’s not accounting at all.
Replying to @GamingChairModel@lemmy.world
Annualized Revenue rate is a made up number, that is a separate accounting fraud, for being a purely selective cherry picked time frame that gets multiplied.
The reason they are changing their made up number from $70B to $50B is because they used to include their partners’ revenue (extra $20b annualized) as their own.
Replying to @humanspiral@lemmy.ca
Annualized Revenue rate is a made up number
It is fundamentally a projection about the future using recent results, and transparent in its methodology. It’s shit methodology, but it’s not hiding anything. So I don’t know that I’d classify it as fraud.
Playing games with “revenue” is another problem, but because that’s misleading about the past, and making an active decision on whether to classify money that was never gonna end up in their pockets as revenue share to partners or cost of revenue. Companies sometimes engage in shenanigans where they give discounts but classify the discounts as marketing/sales expenses rather than foregone revenue. That kind of stuff strikes me as more squarely in the category of accounting shenanigans.
Replying to @GamingChairModel@lemmy.world
transparent in its methodology
To qualify as transparent means disclosing “based on x days in this date range”. That is not disclosed.