Is the AI in the Opagio Valuator making up numbers?

Full Explanation

The concern about AI 'hallucinating' or making up data is valid for large language models (ChatGPT, Claude) which generate novel text probabilistically. Opagio's valuator is different: it's a mathematical engine applying six recognised valuation methodologies (Relief from Royalty, MPEEM, Cost Approach, etc.). Given your inputs (revenue, growth rate, discount rate, royalty rate), the valuation is calculated deterministically — no randomness, no learning, no fabrication. If you run the same scenario twice, you get identical results. This is transparent and auditable: you can see all calculations and assumptions. The AI component: Opagio uses machine learning to help estimate some inputs (e.g., industry benchmarks for royalty rates, typical useful lives for asset types), but once those inputs are set, the valuation is pure mathematics. Transparency: Opagio shows all methodology details, assumptions, and sensitivities. If you disagree with a specific assumption, you can adjust it and re-run the model. This transparency is the opposite of a black box. The risk: garbage in, garbage out. If your inputs (revenue projections, discount rate) are wrong, the valuation will be wrong — but that's user responsibility, not AI hallucination.

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