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.
Genuine question: what are the doing with that money? Buying future components from sellers? Buying land? Paying labour? That’s a lot of money going into something that is essentially a ‘service’ entity. They’re not producing anything tangible.
each datacenter gw, before nvidia price hikes and construction inflation, is $60b. They have promised to rent 33gw of future datacenters. A large chunk of dumbass bubble fuckers have been building these with upfront cash/debt thinking this is possible.
The other problem for OpenAI is that they lose big money just running their existing models. They raised over $21b in March of this year, with even more in “compute credits” and now its gone. They have a 20% tax on revenue to pay MSFT, and in total outside of compute expenses, $2B/month cash burn.