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.

  • AliOski@feddit.nl
    20·
    23 hours ago

    You’re not the first to claim this, but it sounds pretty convincing… I’ll have to see it with my own eyes before I believe it though. Not sure how excited I will be due to the economic repercussions such an event would have, and I might miss ChatGPT, but I am damn well aware that the longer this keeps on going the worse the repercussions will become.

    Either way, if hardware prices are coming down I will be buying.

    • humanspiral@lemmy.caOP
      7·
      22 hours ago

      The models won’t disapear. In the end, I think saving $5T-$10T in repercussions from not giving them $9b, ends with giving them $9b. The quiet limbo part is telling. Everyone who pumped AI bubble is already too overextended. So much other investment is also being requested.

    • pineapple@lemmy.mlEnglish
      2·
      21 hours ago

      Companies like these are too big to go bankrupt, it will crash but OpenAI will make all the excuses to get whatever they need to avoid bankruptcy.

        • pineapple@lemmy.mlEnglish
          2·
          4 hours ago

          “Too big to fail” (TBTF) is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected with an economy that their failure would be disastrous to the greater economic system, and therefore should be supported by government when they face potential failure.[1] The colloquial term “too big to fail” was popularized by U.S. congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation’s intervention with Continental Illinois.[2] The term had previously been used occasionally in the press,[3] and similar thinking had motivated earlier bank bailouts.

          So exactly what I said. They might get bailouts to avoid failure.

      • AliOski@feddit.nl
        1·
        12 hours ago

        Refer to my comment here from some time ago:

        https://feddit.nl/comment/28196083

        I am aware of this possibility and its likelihood, but even so, it will be bad. Not all of the companies are too big to fail. Just the big ones like OpenAI and Anthropic.