I think if things went that far, OpenAIs valuation would very quickly pop to zero.

Real MSFT stock beats a theoretical could-have-been with a 10x upside.

> Real MSFT stock beats a theoretical could-have-been with a 10x upside.

As someone who has done startups, I highly agree with this statement.

But for a lot of people doing start ups for the first time (including my younger self) they don't understand the headache of private market equity, and thus do not apply the correct discount.

As they say, a bird in the hand is worth 2 in the bush.

> there's no way you guys would get the same comp though?

Nadella was directly involved and he's way smarter than that. Comping one the best ML teams in the world correctly is child's play compared to undoing Balmer's open source mess.

LinkedIn data says ~44% of the OpenAI team is "Engineering", the rest is operations, human resources and sales.

So most likely, if most of the employees moved over to Microsoft, they wouldn't get the same comp, at most 44% of the company would.

> 44% of the OpenAI team is "Engineering"

Yes, the "you guys" average HN demographic per the gp comment.

Why wouldn't MSFT honor the increased comp? They are still investing money in OpenAI at that multiple.

They would have to create some kind of crazy structure to avoid wrecking their levels. But of course it could be done.

Don't forget that with new rounds and new valuation there is also a dilution of shares.

If the valuation goes up x10 after next round average developer probably will have the same money locked in rsu/options.

Uh, what? Are you claiming that if a company experiences a 10x (!) increase in valuation, that the dilution fully destroys that upside and the average developer experiences no increase in their comp? That is not even vaguely close to true in my experience.

> Are you claiming that if a company experiences a 10x (!) increase in valuation, that the dilution fully destroys that upside and the average developer experiences no increase in their comp?

Not the person you are replying to, but it depends on how diluted it gets. If they print 9x of currently outstanding shares as the value goes 10x, it would result in those original shares being worth exactly the same as before the 10x jump.

But I agree with you overall, in terms of the actual reality. I don’t think any company with half a brain would do that.

I'm sure Sam's cut will go up x10. But there are many ways to screw options of the regular employees.

I'm not talking about key people, about first 50 employees, etc. Regular people.

I have been the "regular people" at many companies that have increased in valuation. Dilution has never erased the gains of even much-more-modest increases in valuation. This sounds like paranoid fantasy to me.

> Even if they do, you will miss on the upside. MSFT stock is not going to 10X but OpenAI's might.

I'm pretty sure it doesn't work like that due to the existence of leverage. You can make MSFT have the potential to 10x (or ÷10) if you want.

100% vthallam. The upside for OpenAI is much higher.

.... Unless Sam Altman, major research leaders and 50%+ of the employees had transferred to Microsoft

How much do you really think that valuation would stand once OpenAI doesn’t get the massive subsidies from MS on compute? OpenAI couldn’t even be an ongoing concern.