New comer ai search engine - valuation

If a newcomer AI Search Engine without any revenue model can compete with or outperform other AI-powered search engines valued in the billions, how would you calculate the valuation of that newcomer? If it consistently beats and outperforms these established billion-dollar AI-powered search engines, what factors should be considered in its valuation? Smart people, your informed opinions matter.

Ballpark i would consider:

Business Model: assuming the advantage, how would the company make money(subscription, ads, promoted search results, or other). These will get you a basis to estimate revenues, keep in mind that the BM might affect how good the search engine is perceived and the costumer growth curve.

Capex and other expenses: to grow it will need to invest in its infrastructure, product awareness , workforce etc. so basically the cost of growth.

Advantage sustainability: can the company sustains its advantages? If i can replicate it easily then its not worth much.

In summary, define how it pretends to make money and how this will cost you. Then you can estimate roughly cash flows.

Given we are talking about edge cases a good approach is to estimate a scenario and apply a probability. Eg. Its estimates that the market value of search engines will be X in 5 years. There is a 20% prob the company completly outranks the competition and gets 90% of market share, then you have the value. (Chammat made a simmilar case for bitcoin once)

Great explanation @pedrot Thanks :pray: