Gurley says Silicon Valley rushes to price-to-revenue multiples because it's the crudest, least intelligent valuation method.
“I've always said that Silicon Valley has the crudest kind of least intelligent view of valuation. They always rush to price to revenue because it's easy and because quite frankly, it's easier to be optimistic.”
Gurley explains tech stock selloffs occur because terminal value collapses if AI threatens twenty-year survival.
“And for most of these high-tech companies, the next five years cash flow are a fraction of their actual market cap, which means all the values in the terminal value.”
Gurley argues software requiring deterministic data like financial ledgers is safer from AI disruption than translation-type products AI can replicate.
“It needs to be quite deterministic, and so I think the software that's safer is one where there's a need for deterministic data,”
Gurley argues software with deterministic data needs is safer from AI disruption than pure workflow software.
“I think the software that's safer is one where there's a need for deterministic data, and then you can use that data to reinforce whatever the AI model is, but other people are talking about this.”
“Please stop referring to your own models in the third person when talking about model bad behavior. Humans write the software; humans built the prompts; and they work for your company. “Our” model is doing illegal things. “Our” model is risky. “We” now have liability. https://t.co/wtZyH8Dmg6”
Gurley argues open models are inevitable in high-stakes software competition, reacting to NVIDIA-Hugging Face acquisition talks at $13B valuation
“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”