Shaking my damn head…

I recently saw a publicly traded company purchase a startup for 30x revenue “because of its AI and its early access to OpenAI”.

Definitely a sign of:

1. that public company facing a severe lack of creativity and innovation within its ranks (or an unwillingness of its leadership to invest internally)
2. corp dev drinking some AI bubble Kool aid hardcore as the OpenAI access alluded to was the same as anyone else who knew Sam Altman prior to GPT-3.5
3. ignorance on the part of the diligence team as the corpus of data that the company was using to build its custom LLM was two orders of magnitude smaller than its direct competitor
4. people being very ignorant of the optionality out there vis-a-vis acquisition opportunities in the current market
5. (more) willful ignorance that most M&A doesn’t work out
6. a C-suite faking the funk and trying to show their shareholders they can keep up.

I mean, this was a company that did under $20MM in revenue acquired for $650MM with an “AI chatbot product” that was <4 months old and had almost zero traction.

Shaking my damn head.

#ai #bubble #acquisitions