OpenAI is out of cash. It wanted to raise $30B last week but only $11b showed up. It’s now begging for an additional $9b (down from original request of $19b more) from plebs, but no one has committed anything. They want to raise money at a $1.25T valuation, while ANThropic is struggling to clear a $1.3T valuation for its IPO, and ANT is arguably worth double whatever OpenAI is worth, or more precisely OpenAI is half of ANT.
OpenAI is likely this week to lock in that $11b in commitments to prevent “cold feet clauses”, and then add incentives for the other cash it needs. Coreweave is another company that needs cash now, with no good options to raise any of it.
The AI circular financing bubble has OpenAI at the center. Instead of pretending it is worth $1T, all of the promises OpenAI has made have bankruptcy triggering clauses by the promise receivers, and under bankruptcy, selling off assets is worth less than $10b, and datacenters are dark without need for more of them, or more GPUs.
What seems surprising, is that even though the bubble fuckers know that collapse/pop occurs when OpenAI crashes, they are not stepping up with a measly $9b to keep it alive for a few months.
Just throwing out that they wanted $30b and got $11b: those are b’s, not m’s. It’s shocking to think that $11b would not be enough to keep a company like OpenAI running.
A lot of what we’re seeing is tacit leveling of absolutely insane numbers. OpenAI has doubtless a lot more wiggle room than they’ll tell investors, and that’s from someone who really wants this bubble to burst.
That said, if investors stop investing en masse, that’s pretty much the burst. The product has literally never made money. There’s a reason why Altman is desparate to control narrative, because it really is as fragile as “when the rich stop giving us money, there is nothing left”. He needs to convince people to continue to take the risk.