[nstart]

I tend not to focus on that future too much. I used to do so long ago. For example, how could Facebook possibly justify their losses while asking for such a big valuation? Same for Uber. Same for any number of big companies. And it turns out that growth in the future is impossible to predict accurately. Shopify is a good example where at the time the addressable market of online stores was tiny. But it turned out that Shopify created its own market which is huge today. Technology improvements have a way of creating new markets which far surpass today's total addressable market. Factor in currency depreciation and whatnot and sometimes, futures that looked impossible turn out to be possible.

Not saying anyone is wrong in pointing at the buildouts for AI and questioning its feasibility. Just making the argument for why I personally only look at operational costs and revenue because it's the only real-ish value I can look at and judge if a business can grow sustainably.

As a counter point, the red flag to all of this is R&D costs growing for each model release. If that continues and revenue cannot outstrip it, then these companies have a problem and it'll probably be that just 1-2 frontier labs can survive this once the dust settles.

[mike_hearn]

I don't think Uber was a great ROI for investors though. It lost almost all the money they gave it in return for a business with entirely average profit margins (average across all industries, far lower than average for a SaaS app).

[hollerith]

Since Uber's never paid dividends, ROI is easy to calculate.

At the end of its first day of trading (in May 2019), Uber's price was $41.57 per share, and it is currently $72–73 per share for a compound annual growth rate (CAGR) of roughly 8.2% per year.

In comparison, the BVP Nasdaq Emerging Cloud Index earned roughly 22–25% CAGR over the same time interval.

So (as usual) Mike Hearn is correct.