There are reports coming out that OpenAI just finished a record-breaking fundraising round. The number being touted is 40 billion dollars—a long shot from last October’s figure of 6 billion. We have to ask: What is going on?
Normally, you won’t find me siding with negative voices, but I’m having a hard time ignoring them right now. It does seem we’re throwing a ton of money into a magical firepit, hoping it’ll win us the battle. Did we already forget that China released AI models that vastly surpass America’s efforts?
There are some important details I hope get discussed more, because if the illusion breaks—if the Babel tower falls—they’ll surely be the points of failure.
Investor Protections
The investors were able to negotiate a failsafe of sorts. If OpenAI fails to move to a profitable model within two years, they can get refunded or renegotiate their holdings.
This is an understandable request, since it really has been a firepit for money up to this point, but it also puts insane pressure on them that could lead to inferior results. Meeting the deadline becomes a do-or-die scenario, after all.
Leadership Drama
As we know, no project of this magnitude can exist without friction, and OpenAI is no different. With the recent exits of co-founder Ilya Sutskever and CTO Mira Murati, we can assume all is not peaches and cream, as they say.
Not that I’d take Elon at his word, but he’s called Sam Altman “Scam Altman”—a move he probably learned from Trump. Their feud is vastly documented online.
The AI Bubble
I find these numbers pointing directly in one direction: market insanity. The parallels between what we’re seeing today and the dotcom bubble are irrefutable. However, that doesn’t mean the bubble is ready to pop—not yet.
One thing I will say is that I’m sure plenty of heavy hitters are having a hard time accepting the current markets. Trump’s tariff is bringing everything except stability to the economy, and it’s hard to imagine the soil being ripe for any industry to flourish. Only time will tell.
MenO