Is the AI in Opagio's Asset 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. The Asset Valuator in Opagio Intangibles is different: it's a mathematical engine offering seven recognised valuation methods (Relief from Royalty, MPEEM, Replacement Cost, 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. Nor does Opagio use machine learning to estimate the inputs: the assumptions, such as the royalty rate, discount rate and growth rates, are ones you enter, and the valuation is then pure mathematics. Transparency: Opagio shows the method used and your assumptions and, for Relief from Royalty, MPEEM, Replacement Cost and With and Without, a sensitivity table. 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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