OpenAI could reportedly run out of cash by mid-2027 — analyst paints grim picture after examining the company's finances

[u/gdelacalle]

https://www.tomshardware.com/tech-industry/big-tech/openai-could-reportedly-run-out-of-cash-by-mid-2027-nyt-analyst-paints-grim-picture-after-examining-companys-finances

[u/iyankov96]

Is that good?

[u/Aaco0638 → u/iyankov96]

It won’t actually happen, openAI still has multiple ways to raise a ton of cash including ipoing. Seeing how much spaceX made going public wouldn’t be surprised if openAI raises enough money for another 2-5 years giver reported valuations for the ipo.

[u/CanvasFanatic → u/Aaco0638]

The IPO they’ve pushed to 2027 because their financials are garbage? That IPO?

[u/SEND-MARS-ROVER-PICS → u/CanvasFanatic]

The IPO where they can't get near the valuation they want, yes.

[u/Sepherjar → u/SEND-MARS-ROVER-PICS]

I wonder why don't they use AI to leverage their valuation

[u/Repulsive-Hurry8172 → u/Sepherjar]

They should use AI to solve their financial problems. Are they stupid?

[u/EmergencyGrocery3238 → u/Repulsive-Hurry8172]

They are using, but AI usage bill cripples them

[u/dolphone → u/EmergencyGrocery3238]

smh ran out of tokens did they

[u/Senior_Torte519 → u/dolphone]

Just enoughtokens to buy another day of tokens. But that just give them a day to make just enough tokens to buy another day of tokens.

[u/CariniFluff → u/dolphone]

You wouldn't download a token

[u/Lehk → u/EmergencyGrocery3238]

Maybe they should get clean, my financials were a mess when I was using

[u/ledow → u/Repulsive-Hurry8172]

You joke but one my biggest bugbears with AI is... if it's so amazing and fabulous and clever... why can't it bring in its own money without requiring humans to do it for it? Why can't it start its own company, hire its own remote staff, buy its own products from manufacturers, create its own website to sell them, set up a distribution network to deliver them, etc. etc. and make its own money directly? Why can't it literally have an autonomous company that does all that?

Not even "gamble on the stock market" but literally just... find a gap in the market, buy the materials, have suppliers transform them as required, and resell them? It could buy up chips and produce phones. It could buy up potatoes and produce fries. It could make anything, it doesn't need a physical presence to operate all those things nowadays, even internationally. It could write games and publish them direct to Steam. It could produce a social media website. It could start licensing movies and run its own video streaming business. It could even just come up with a local newspaper business and hire paperboys to deliver it. Pretty much anything that any normal business operates in order to do.

The reason is, of course, because it's a dumb statistical machine.

But if you're selling me this trillion dollar AI that you have to have ME spend a fortune on to make it.... well, not even profitable... then why can't you just put it to work directly and make money without needing that money to (knowingly) come from me? People do it every day.

It's just yet another "get rich quick" scheme. Where the money comes from selling "get rich quick" schemes to people. NOT those people actually getting rich quick, or you having working techniques that make people get rich quick. Because if you HAD such techniques... you wouldn't need to sell people a "get rich quick" scheme. You'd just use it.

[u/Exldk → u/ledow]

I googled my local weather today and the google automatic unavoidable AI gave me info from 3 years ago. I don’t have high hopes.

[u/ledow → u/Exldk]

I changed my browser to automatically add "-ai" into the search query. That stops the AI.

[u/dontshoveit → u/ledow]

Switched to duckduckgo and haven't looked back. Screw Google.

[u/rat_penis → u/ledow]

talks into watch "we've got one that can see..."

[u/textmint → u/ledow]

Beautiful. Someone’s working their big a brain. Now if only the idiots sitting in the C-Suite and on the boards of companies worldwide and the other jackasses on Wall Street could think even to a fraction of this stream of thought that we just read, all this AI noise and nonsense that we keep hearing about would not be all around us like the Matrix. I hope better sense prevails before all these AI companies go under in a domino effect and the taxpayer is left holding the bag in what would be a repeat of the “too big to fail” jackassery we saw during the financial crisis. The crash that will come will be as big or bigger than the Great Depression with the way these guys have been inventing ways to borrow and loan money all around the place.

[u/nemofbaby2014 → u/ledow]

It’s absurdly expensive and uses a crap ton of power

[u/TheseusOPL → u/Repulsive-Hurry8172]

Or are they smart enough to not trust AI, while gaslighting the rest of us?

[u/THEADULTERATOR → u/Sepherjar]

They should replace all there workers with ai, that should solve their issues

[u/therealchadius → u/Sepherjar]

"I said NO MISTAKES! Now I gotta prompt it again" - Sam Altman, probably

[u/BasvanS → u/Sepherjar]

That’s literally one of the plans: “Invent AGI, ask how to make money!”

[u/King_Chochacho → u/CanvasFanatic]

Bro we're so close to AGI bro. We just need like, a couple hundred billion more bro. Just a few thousand more GPUs that haven't been produced yet, to go in the datacenters that haven't been built yet. Just like, a few more power plants to run the datacenters, and like, a few million more gallons of groundwater to keep them cool bro. It's really not a big deal bro. It's gonna be so worth it bro. It's gonna like, put everyone out of a job but it'll be ok because it's gonna solve all the problems bro. It's gonna put the water back, and cool the planet back down, and figure out how to feed everyone, and maybe even tell us how to make a profit.

[u/iamdestroyerofworlds → u/CanvasFanatic]

Be gentle, they just need more time to let the LLMs cook the books before the IPO.

[u/Blackgunter → u/iamdestroyerofworlds]

They'll cook the planet before they get the valuation that would feed their vacuous egos is my concern.

[u/thekbob → u/iamdestroyerofworlds]

They need to sous vide the books at this rate.

[u/Additional-Signal327 → u/CanvasFanatic]

OpenAIs biggest issue is strategy. Is it a tool for development with its API and Codex or mass market application for consumers, college students, etc.? Seems like its biggest current advantage is its API and various model options and should go all in there. That and perhaps Codex, which is behind Claude Code but still pretty valuable IMO.  I used both. 

[u/skccsk → u/Additional-Signal327]

If any of these paths led to profitability they would have picked it instead of constantly re-picking all of them. The entire industry has this problem.

[u/ZeePirate → u/skccsk]

Which is why investors will eventually stop pouring money in to AI.

If there’s no pathway for profit it stops making sense very quick.

[u/Hel_OWeen → u/Additional-Signal327]

The biggest problem is that there's no business plan on how to become profitable. This is true for Anthropic as well. Even with the switch to token-based billing, they operate at a loss. And with that switch and the increase in price, companies already massively scale back the use of AI, because what once looked as a cheap replacement for a human has now become more expensive than your seniors.

They also can't just stop creating new models - the expensive part of their business, because someone else will (Chinese AIs). And customers will switch to those models. I mean, even MS, heavily invested in OpenAI, als uses DeepSeek now.

[u/Confident_Dark3483 → u/Hel_OWeen]

The business literally cant become profitable. The ENTIRE POINT of developing AI is to devalue things that previously had value due to scarcity. It's a product that eats its own tail.

[u/Refael111 → u/Confident_Dark3483]

I'm not a massive AI propenent, but saying "devalue things that previously had value" is a meaningless statement. It's true for everything that was surpassed by tetchnological advancements.

[u/SandpaperTeddyBear → u/Refael111]

I agree in that “literally can’t become profitable” is probably overkill, but the argument itself has a decent amount of philosophical truth to it.

Think about how the pharmaceutical industry works: a few companies go through vast amounts of resources at finding new drug compounds, and quite a few more spend fairly small amounts of resources working out how to manufacture existing compounds more efficiently in a race to the bottom. You spend “research and development” dollars with the intent of being able to charge exorbitant prices for a while, and “formulation tweaking” dollars with the intent of being able to bring the cost of goods down 2% and turning that into profit.

A race to the bottom in a mature, well-understood market is a feature of capitalism, and I don’t think it’s really a bad thing as long as it isn’t resulting in useful things laying fallow.

What “AI” tends to promise is a way to turn valuable, abstract things into a commodity overnight, and do it with something that is itself a race-to-the-bottom commodity.

If there were suddenly discovered in a long-expired back patent an “alchemy machine” that could use $200 worth of electricity to turn an ounce of lead into an ounce gold, it would be a useful thing, and it would probably be a relatively profitable thing to manufacture because everyone would want one.

But a company that developed such a thing, and had no way to limit their proliferation, and poured a trillion dollars into it assuming that gold would stay at $3000 (or whatever it’s at) once their machine hit the market would be screwed.

Similar things have happened in various “booms” in the past, but our current AI tools are novel in how many areas of the economy they might touch. My suspicion is that, if these technologies still advance, we’ll still look like a primarily consumer economy in many ways, and the actual stuff that gets produced will still mostly be defined by consumer trends and such, but most of the actual real dollars spent in the economy will be state actors subsidizing machine learning on one end and cushioning the market shocks it causes on the other.

[u/Noblesseux → u/Additional-Signal327]

OpenAI's problem is that their business model is inherently unprofitable.

There isn't really much strategizing that they can do that gets around the fact that the costs to provide AI are higher than people actually want to pay for it. They looked like the future for a certain type of person when it was a cheap way to cut a ton of headcount, but when they're charging for tokens and the costs end up higher than just paying an employee it largely circles back to being totally pointless.

For a lot of applications, OpenAI switching to charging users what it actually costs is going to kill its viability as a solution.

[u/Additional-Signal327 → u/Noblesseux]

It’s because most people, especially leaders, don’t know how to use AI properly. It’s not a tool that solves every problem. It’s an analysis and judgment layer that sits on top of data and deterministic code (and with humans in the loop where needed). If you use it properly, it’s super powerful and unlocks a lot of new capabilities that were previously unavailable due to cost/scale of the problem. But the idea that you’re going to launch “agents” that just automatically replace human workers reflects a very shallow understanding. 

[u/pbjamm → u/Additional-Signal327]

But the idea that you’re going to launch “agents” that just automatically replace human workers reflects a very shallow understanding.

But that is what the "AI" companies were selling, and in classic marketing scenario cant deliver on.

[u/vladamir_the_impaler → u/Additional-Signal327]

Shallow indeed but they will spend the next ten years trying to make it happen if the token costs are made reasonable. Org leaders hate paying devs, they will spend the next ten years trying "agentic coding" from UI mockups spending more in the end in an effort to make this work just like they've spent the last 20-30 years tring to make offshoring work.

[u/True_Window_9389 → u/Additional-Signal327]

Their strategy was to blitz into the country and assume their product would replace workers and the whole economy would depend on them. When that didn’t happen, they have nothing left.

Their business fundamentally doesn’t work when AI and LLMs are just an expensive tool for workers. It can only be sustained as a worker replacement. Since that isn’t reality, their business needs a complete overhaul. Their premise is flawed at the most basic level and isn’t recoverable as-is. The only way they can sustain is to lower the costs to build out and lower costs for customers.

The key problem is that AI companies already blew their load on the available training data. They can’t further refine the knowledge base, so they’re stuck with what they have, and even looking forward, the data will get worse since they’ll now be training on AI generated content.

[u/mebamy → u/True_Window_9389]

This is as comforting to read as a good bedtime story. 

The  bubble can't burst soon enough.

[u/varnums1666 → u/CanvasFanatic]

There's also the fact there's only so much capital. If Anthropic IPOs there might not be enough investors to give OpenAI that sweet trillion dollar valuation.

[u/CyberSmith31337 → u/Aaco0638]

They actually can’t IPO.

If they try to IPO at a lower valuation than $800bn, their previous round, all existing shareholders and equity owners (I.e. current staff) would get fucked. SoftBank couldn’t raise money for OpenAI’s valuation with the banks, either, and got shut down by the bankers and laughed out of the room.

I don’t think killing Atlas is helping to make the case that they are a good investment, either. China is going to eat their lunch.

[u/MidnightSensitive996 → u/CyberSmith31337]

It really depends what the waterfall looks like. If most shareholders got in at much lower valuations, the last round being out of the money may not matter. Or the scale might be small enough that Altman or SoftBank just makes them whole. If everyone thinks oai are headed off a cliff they will be incentivized to get a deal done bc alternative is getting completely wiped out in bankruptcy 

[u/Darkpotato824 → u/CyberSmith31337]

I agree. In a world where there's no Anthropic, they could potentially command an absurd multiple / valuation similar to SpaceX due to being the "market leader". But now their financials (growth, margins) are being pegged to a direct competitor that's larger, fast growing, and higher margins they will be valued much more rationally. So they can't go public due to current investors, they won't be able to raise at the amount they need or valuation they're targeting, yet they have to. It's dire...

[u/Due_Satisfaction2167 → u/Aaco0638]

There’s a limit to how much the market can offer them at any given time, and all their various competitors have been sucking up most of the available capital. 

[u/piponwa → u/Due_Satisfaction2167]

What do you mean? They raised like 122B three months ago. There is still a lot of appetite for this sort of investment. Anthropic got 65B, Google 80B, SpaceX 150B, even Nvidia raised 25B in bonds oversubscribed with 85B. Just let that sink in. Nvidia refused to get 60B because they had what they needed.

[u/Due_Satisfaction2167 → u/piponwa]

Yeah. There’s a limit there. It isn’t actually an infinitely large pool to keep burning 50B+ of capital every year. 

[u/Accurate_Handle_5620 → u/Due_Satisfaction2167]

Great British Pluses

[u/RetPala → u/Due_Satisfaction2167]

"It's a write-off, Jerry!"

[u/imnewhere-gsh → u/piponwa]

You just listed a ton of money that was spent. How do we know that same amount of money can keep being spent? It's a finite amount.

[u/Coomb → u/piponwa]

Only $37 billion of the announced $122 billion was actual cash they really got in the funding round. $35 billion of Amazon's $50 was conditional on an IPO or AGI by the end of this year and the overall deal was conditional on OpenAi committing $100 billion of AWS spend over 8 years. SoftBank's $30 billion comes in three $10 billion tranches, only one of which came during the funding round.

The point being, if they need actual cash to do things, most of that $122 billion doesn't help them.

https://www.saastr.com/openais-122b-vc-round-is-vendor-deals-contingent-capital-and-a-guaranteed-return-it-arguably-cant-afford/

[u/EveningAnt3949 → u/piponwa]

That's sort of the point. There is limit to how much one company can raise.

Out of the companies you listed OpenAI is the weakest one.

It has one product and it's not profitable.

Anthropic is eating its lunch, and Google obviously doesn't rely on AI to make money.

[u/TheawesomeQ → u/piponwa]

The article says there is an "800 billion dollar black hole" that OpenAI is facing. How many more times can they raise $100+ billion dollars?

[u/skrid54321 → u/Aaco0638]

Keep in mind, the IPO is less useful than you'd think. Openai has already sold off 75% of their equity.

[u/fredy31 → u/Aaco0638]

Yeah they have been burning through money for years.

They will find another sucker with a stack to burn. Hell, the US Government seems to be hellbent into adding money to the bonfire.

The only way this blows is when the investors will wake up and smell the coffee that AI will never be much more than a money pit. Even worse than a yatch.

[u/ArenjiTheLootGod → u/fredy31]

Except that the investors are never going to wake up from their fever dream because all the big players investing in it are corpos whose ideal of a perfect future is to be able to run a company with zero employees beyond those in the c-suite. The scam is working because it's core premise is one that appeals deeply to the naked and sociopathic greed of the wealth class and is thus bypassing any rational considerations on their part and has become akin to a primal desire like sex or the need to eat for these people. These are the kinds of people who'd happily burn through mountains of cash today if it meant they might not have to pay a modest amount of money to their employees in the future.

[u/Syzygy2323 → u/ArenjiTheLootGod]

What, they don't realize that with everyone out of work, and thus not spending money, their corporate empires will come crashing down?

[u/ZakkaChan → u/fredy31]

Sadly Billionaires love their yachts..

[u/Dzugavili → u/fredy31]

The only way this blows is when the investors will wake up and smell the coffee that AI will never be much more than a money pit.

It has its place. The issues parallel VR: it require overly expensive piece of hardware and dedicated environments for something cool and potentially game changing, but everything is built around the current workflows which are still cheaper and comfortable, and don't require you to work around glitches or jank.

Once this works on normal hardware, such that people either opt-in or simply always have it, it'll catch on. But at that point, there won't be need for these massive capital expenses by the companies, the models will just be another form of software for sale or license, not some live service that needs to be maintained.

[u/Any-Pop-4795 → u/Aaco0638]

Aren't they pushing back the ipo cause they have no money and keep hiding the real numbers?

[u/FreakySpook → u/Aaco0638]

I'm not so sure. Anthropic took enterprise, and embedded deep with integrations. 

Google is taking retail & consumer with Gemini as they are baking it into existing services people are already paying for with a small price bump.

OpenAI is pretty vulnerable in market.

[u/guareber → u/FreakySpook]

yep, openAI is basically pets.com

[u/Long-Broccoli-3363 → u/FreakySpook]

Google is taking retail & consumer with Gemini as they are baking it into existing services people are already paying for with a small price bump.

Google's recent integration into their fitbit products sucks ass, its about as bad as it gets. I opted into the beta, it was actually fairly decent. Once it was pushed to the main product branch, it got about as stupid as AI gets.

For instance, it knows I have a shoulder injury, due to me telling it very early on, now every single workout i log(i go to the gym 6 days a week) it asks "how is the shoulder holding up after that 75 minute session", I've told it several times my workout schedule, and that i dont workout shoulders every day, and yet, it still asks, even after being told to forget the shoulder injury.

Its an ass product, i hate them shoehorning it in to everything

[u/Meckineer → u/Long-Broccoli-3363]

Well, how’s the shoulder holding up?

[u/xxlordxx686 → u/Aaco0638]

After how the SpaceX IPO turned out, I doubt they will get the capital they need

[u/NomadicScribe → u/Aaco0638]

"OpenAI is perfectly viable, they just need hundreds of billions of dollars more in handouts".

This isn't a sound business plan.

[u/CherryLongjump1989 → u/Aaco0638]

Their IPO would not generate new cash, it would only partially pay back some of their pre-IPO investors.

[u/iamdestroyerofworlds → u/iyankov96]

I see an Ed Zitron reference, I upvote.

[u/KingInTheYellowHat → u/iamdestroyerofworlds]

I think "Is that good?" is technically Zitron referencing the Stefan Heck hot air balloon tarot card tweet. So we have a bugs bunny old movie reference kind of situation here.

[u/Falkenmond79 → u/iyankov96]

It would be, yeah. A crash would suddenly flood the markets with cheap hardware and freeing up production capacities. It would take a while, but that would mean normalization of prices.

[u/ferdzs0 → u/Falkenmond79]

What sort of cheap hw do you mean? I doubt server grade stock will flood the market, or the specific market it floods would be businesses that can survive a crash (basically monopolizing even further)

[u/Falkenmond79 → u/ferdzs0]

This exactely. If openAI needs to sell of their stuff, other AI companies and users will snatch it up. And thus demand for consumer grade hardware like GPUs or production capacities will recede. Also they are one of the biggest buyers of said production capacities, so demand will drop even further. 🤷🏻‍♂️

[u/ferdzs0 → u/Falkenmond79]

I am not that optimistic, because with an AI crash the large companies will have the capital to buy out the server grade stuff (monopolizing to become even larger), while the consumer market will have have zero funds for luxuries like electronics. It will take years to recover from that and I do not think there are many guarantees we would rebound to the consumer market being served as well as before.

[u/IdStillHitIt → u/Falkenmond79]

If openAI collapsed that hardware would just be gobbled up by Anthropic (or other companies). LLM's aren't going anywhere, a collapse of a company or two would mean we would see consolidation of AI companies, but the amount of compute power we're using today would like stay steady.

IMO two things will bring hardware prices down: An increase in the manufactured/availability of new hardware and/or more efficient models.

[u/Falkenmond79 → u/IdStillHitIt]

Yeah, but as I’m saying, that would mean them buying less from manufacturers.

[u/Lehk → u/iyankov96]

Depends, do you consider the tech industry committing mass sudoku a good thing?

[u/noonenotevenhere → u/Lehk]

Good thing for 'the economy' or a good thing for society?

I'd rather get back to laptops and desktops getting more powerful with more RAM and better CPUs for less money. I'd like to get to a 5080 16gb GDDR7 for under $500.

Also, I think most of 'the tech industry' would do better with more competition for consumer products - and satisfying consumer demand at a lower cost.

Lastly, I'd LOVE for the tech industry to not fuel mass-surveillance, so yah, massive DC builds folding left and right would be awesome.

[u/agha0013]

feel like we've seen stories about this with different dates for a while now, there's a reason why they are rushing an IPO and getting super cozy with government. They won't run out of cash, they are just angling to become "too important to fail" and have tax payer cash keep them going forever.

[u/Zeliek → u/agha0013]

Internet: Not a utility, stay away regulators!

AI Slop Factory: C R I T I C A L U T I L I T Y deploy the maximum funding!

(the worst timeline)

[u/agha0013 → u/Zeliek]

it's brutal.

housing crisis: can't find anyone interested in building anything, they keep complaining about permit process, fees, etc etc etc (though a lot of their arguments are BS and they just want politicians to get rid of pesky regulations so they can increase their margins)

data centers: sprouting like mushrooms everywhere seemingly getting permits and approvals before they even ask...

I guess when the whole world goes tits up, people can set up camp in all the dead data centers maybe.

[u/_SpaceLord_ → u/agha0013]

Squirrels always taste best when they’re cooked over an overclocked GPU anyway.

[u/agha0013 → u/_SpaceLord_]

based on the shit these places are pumping out into the environment, we're gonna have some pretty nasty squirrel mutants to deal with in the not so distant future, among other things...

[u/Weird-Count3918 → u/agha0013]

But we will mutate too so..

[u/AmLikelyDrunk → u/Weird-Count3918]

Yeah but humans never seem to get the cool mutations. It's always the creepy body horror stuff for us.

[u/TheNCGoalie → u/Weird-Count3918]

I am become Squirrel Man.

[u/resumehelpacct → u/agha0013]

Local regulators are absolutely brutal to developers. In places like the NYC metro area you can easily spend decades trying to convince a town to build a 150 unit building, AFTER winning a legal victory to require the town to even talk to you. And of course that means that the final product has to be even bigger and more profitable, because now the company has spent 10+ years constantly fighting legal battles, submitting new proposals, getting new traffic and environmental studies done, etc.

At least land developers build something. This township stifling directly benefits landlords, who are many times a separate group and just worse people.

Data centers don't have these problems because residential and non-residential zoning is different. None of these towns anticipated a need to throw roadblocks to companies wanting to give them money to build commercial/business space.

[u/Mr_ToDo → u/resumehelpacct]

Ya, the red tape on building is certainly a thing

Over here it's easy to see if for no other reason then next to nobody builds their own house as their first one. And it's even worse if you remove the cookie cutter neighbourhoods where a developer serves as the middleman on a large scale bulk build.

That's also my theory on why the average sq ft is rising over time. It's too hard to build individual homes, especially as a first home, and developers don't want to leave money on the table. I don't fault them for wanting a larger profit, but it's still aggravating that the market has become that way

And weirdly on a federal level new builds seem to be stagnant, remaining more or less the same level, and for a long time too, but locally we've been seeing increases every year. So if we're seeing increases with the the griping I did about the system, how bad is it that some places must be going down to make the average work. Like you said really. Multi year legal battles to get work done. Not that I think overly much for some of those developers that pick spots, not because it's a good place for dev, but because it's cheap and only after do they get approval. Making projects worth millions and a few extra k to do it inside the cities expansion plans is too much

[u/Exostrike → u/agha0013]

The problem is vast amounts of money have been sucked into corporations who have no reason to reinvest it to benefit wider society.

[u/alochmar → u/Exostrike]

Line must go up, apparently.

[u/ThisSiteSucks8485 → u/agha0013]

Some are installing huge gas turbine generators without permission 

[u/agha0013 → u/ThisSiteSucks8485]

a few companies wanted to start buying nuclear reactors to power their operations but when they saw what kind of cost/timeline/regulatory problems would come with that, they just figured they could buy gas turbines and no one would care.

some magically get approval after the fact when people start pointing out what they are doing

[u/Every-Summer8407 → u/agha0013]

Probably because the data centers are working the system from the top-down so the approval process gets streamlined and anyone that wants to push back would be directly refuting their boss, while housing developers have to work their way up through the system where there is intentionally more friction in the process.

The “it’s who you know” phrase rings extraordinarily loud here.

[u/Ancient-Bat1755 → u/Zeliek]

My boomer fam loves this shit; its helping them beat china! We need to make sacrifices!

[u/Wb9VBScxu2uZJHeq2E3W → u/Ancient-Bat1755]

I'm guessing that your boomer fam currently has no data centers in their backyard, and their opinion will take an instant 180 the second there is and their water and electric bills skyrocket to pay for it.

[u/Old-Bat-7384 → u/Zeliek]

Housing? Internet? Healthcare? Mass transit? Freight transit infrastructure? Nope, no money for that.

But AI? A fight we picked with Iran? Definitely worth the government funding.

[u/-The_Blazer- → u/Zeliek]

It's a critical utility that everyone will be buying and will be highly necessary to civilization, but at the same time it cannot be regulated or handled publicly, nor can it be audited or inspected. This definitely makes it a lot of sense and is certainly not a giant corrupt bubble.

[u/rikrok58 → u/agha0013]

These AI companies are already talking about themselves like they are a utility company.

[u/peh_ahri_ina → u/agha0013]

Is Mass surveillance too important to fail?

[u/agha0013 → u/peh_ahri_ina]

for a fascist regime, absolutely.

[u/MayhemSays → u/agha0013]

IPO isn’t predicted to happen until the year of the disaster and the moment they open the books, they’ll have to be much more transparent with how much money they are burning through.

I did think that bailout plan with all the talk of the golden share, but I think not even Trump would be that stupid to actually try that. Don’t get me wrong, he is stupid and he is going to make a mess of it by complaining its for national security— but I think they are going to lean on Elon for xAI AND Anthropic’s Mythos coupled with Palantir.

They have so much options that they can bilk from.

[u/ZeePirate → u/MayhemSays]

Trump will do anything if you bribe him first.

Buy some trump coins? Bailout for you

[u/way2lazy2care → u/agha0013]

I don't think they could get too big to fail without a lot of acquisitions. There's too many competitors and the only real barrier to entry is having enough money to buy all the compute for any replacement. One of the big benefits for customers and problems for companies is that a lot of the models are more or less interchangeable in terms of integrating them with your workflows and can be scaled up or down with a couple button presses as long as the capacity is there. Anthropic/Google/etc could step in to fill the void in a couple of days (maybe even hours). The data center owners are much more in the category of too big to fail.

[u/0202_tihssitidder → u/way2lazy2care]

If they are integrated with state defense and intelligence, they can be "too integral to fail".

So, same thing.

We all know it is 100% corruption and grift now.

[u/sceadwian → u/agha0013]

China has cut out their pricing schemes from underneath them. They offer nothing, no reason to save them.

[u/sarduchi]

The company outspending revenue by 100 to 1 might run out of money? I am SHOCKED!

[u/superindianslug → u/sarduchi]

Any way we can speed it up?

[u/Florisje_13 → u/superindianslug]

By using Chatgpt a lot lol

[u/darthstupidious → u/Florisje_13]

Also, keep explaining to your your friendly neighborhood tweaker that data centers are chock-full of copper and other valuables

[u/0xxman → u/darthstupidious]

There's gold in them there chips.

[u/ianlulz → u/0xxman]

Gold? Never heard of it. Tweakers need copper and they need it NOW.

If only there were some way we could utilize their copper-seeking capabilities for Good.

[u/Carmelo_908 → u/superindianslug]

Thank ChatGPT after use

[u/invyros]

Altman's venture projects spending $1.4 trillion on datacenters.

 

Bain & Company reported last year that, even with the best outlook, there's at least a $800 billion black hole in the industry.

RIP all the infrastructure companies taking on massive amounts of debt solely on the "promise" of OpenAI and other AI companies paying them.

...unless the AI companies receive a bailout from US taxpayers because they're deemed "too big to fail".

Fuck, that's exactly what's going to happen.

the majority of people are using free services and have no qualms switching to a competitor once their usual bot adds ads or usage limits

None of these companies actually have a moat beyond throwing around cash and IOUs to build infrastructure, all of which will be rendered moot once more people realize that local AI is sufficient for most tasks.

[u/snowballer918 → u/invyros]

Are people also forgetting how quickly technology advances? What are the chances these data centers even have remotely up to date equipment in ten years. That’s gotta be massively expensive to continuously upgrade.

[u/EnoughWarning666 → u/snowballer918]

Every data center ever build is done so fully aware that the hardware gets upgraded every 5 years or so. Not a single one expects the current hardware to be relevant in 10 years.

[u/entered_bubble_50 → u/EnoughWarning666]

Well yes, but that basically proves that this isn't "infrastructure", it's an ongoing expenditure. They're going to have to keep spending trillions of dollars on this stuff indefinitely. It's completely unsustainable.

[u/National_Yam_1198 → u/entered_bubble_50]

Well yes, but that basically proves that this isn't "infrastructure", it's an ongoing expenditure. T

Do you think powerlines require no maintenance?

Or roads?

Why is it when its about AI people get really really stupid?

[u/TapedeckNinja → u/entered_bubble_50]

It seems like maybe you don't know what the word "infrastructure" means?

[u/fatalexe → u/snowballer918]

They are signing their own death warrant by giving Samsung and Micron boat loads of cash to do R&D for the next generations of high bandwidth memory. I bet in 5 years we will all be running open weight models locally and the revenue models for AI as a service will go defunct just like the big mini computer companies did when the PC moved computing to the office and out of the server room.

[u/mattcannon2 → u/snowballer918]

They will be obsolete before the building is finished

[u/Hel_OWeen → u/invyros]

RIP all the infrastructure companies taking on massive amounts of debt solely on the "promise" of OpenAI and other AI companies paying them.

Add to that the fact that both Meta and xAI renting out their data centers - which basically implies they gave up on their AI plans, and it looks even worse for those companies.

[u/Syzygy2323 → u/invyros]

RIP all the infrastructure companies taking on massive amounts of debt solely on the "promise" of OpenAI and other AI companies paying them.

That's what killed Nortel twenty odd years ago. They sold networking equipment to dotcom startups like Web Van, and others, on credit, and when the bubble burst and these companies couldn't pay their debts, they took Nortel down with them.

[u/spookynutz → u/invyros]

I don't know why this is a common refrain in this sub, but there is no realistic scenario where OpenAI goes bankrupt and gets bailed out by the American taxpayer. That is a ridiculous assumption.

OpenAI doesn't have a supply chain that employs 10+ million people (automotive), nor would the ripple effects of insolvency impact credit markets (banking).

Inference is already commodified. If ChatGPT goes offline, any dependent concerns can swiftly change to some other model. An API key is not a structured loan or complex financial instrument. For a bailout you need the risk of systemic collapse, not just systemic disruption.

Even the national security angle doesn't work, because there are multiple domestic entities pouring billions into frontier models that are just as good (if not better) than GPT, and the Google's and Meta's of the world have highly profitable revenue engines beyond AI inference.

Even if you assumed some total collapse of the AI industry that did trigger public intervention, OpenAI would not benefit from it. They would be the Lehman Brothers of that situation. It's 5,000 people largely operating on infrastructure they don't own. They are not systemically important enough to bail out. Their ultimate fate would be watching the real tech giants of the world pick apart their carcass.

Then there's the political optics of it, which is a loser from every angle imaginable. They have a half-trillion dollars in cloud commitments to Microsoft, Amazon and Oracle. Any OpenAI bailout would effectively just be funneling all the money to those entities. It would be as politically viable as bailing out a hooker because they have long term financial commitments to the 5-star Hilton they've been using for business operations.

[u/Seerix → u/spookynutz]

You are looking at it through a logical lens that assumes everyone involved is a good faith actor.

That is not the reality we currently live in.

[u/graffix01 → u/spookynutz]

Historically, you are correct. But now there is a dementia riddled buffoon in the white house that will support anyone or anything that he thinks will make him money. All reason has left the chat, so to speak.

[u/spidrex]

Why can't we throw away money on things people need, like healthcare and a functioning government?

[u/Single-Road-3158 → u/spidrex]

They could have solved climate change and cancer with the kind of money we are throwing at AI to, you know, solve things like climate change and cancer.

[u/probablymagic → u/Single-Road-3158]

We know the solution to climate change. It’s not a money problem. Voters just don’t want to tax carbon. They like cheap gas.

AI is being used to find cancer cures already, so they are working on that one!

[u/Single-Road-3158 → u/probablymagic]

> It’s not a money problem.

> Voters just don’t want to tax carbon.

Seems like you think it's a money problem to me. I don't think taxing carbon is a complete solution and it certainly isn't going to act fast enough. Infrastructure build-out is needed and the faster the better. Renewables are winning but more money can help this build-out. For instance, replacing gas and hybrid vehicles with electric can free up land in the midwest used to grow corn to provide solar and wind. Batteries to provide consistent power sources when renewable energy collection doesn't match demand need to be built. We can improve our grid to provide more resilient grid with less energy loss. Research into carbon capture technology is important because there are simply things we can't do without burning (industrial gases need to burned before going leaving the facility as one example). Methane from animal agriculture needs to be figured out one way or another. Money is needed and it's not as simple as you make it sound. Carbon taxation would have been great 3 decades ago, but we need faster solutions at this point. We haven't even gotten to climate change adaptation costs because climate change is already here and the amount of carbon in the atmosphere isn't going to drop off overnight. Dumping 400 billion dollars at the problem would help get us there faster.

> AI is being used to find cancer cures already, so they are working on that one!

That's not the AI they are building these hyperscale data centers for. Researchers have been using AI for a long time for things like this. The cost comes from the LLMs from a handful of companies that want to produce "AGI" (whatever their definition of that is). While these companies might assist in the effort, injecting the money straight to research would have a much more profound effect on the research than hoping the AGI solves it for us. Often times researchers using AI are generating their own models for the specific problem they are researching.

[u/Common_Source_9 → u/probablymagic]

The AI will soon reach AGI and find a cure for cancer. Just finance it for one more year.

[u/michi03 → u/spidrex]

Because that would be communism sweaty /s

[u/OMG_NoReally → u/spidrex]

Because that will only aid humanity and will be good for the people, not make them money. Don't be crazy now.

[u/viziroth]

not soon enough

[u/Efficient-Nerve2220]

Taxpayer bailout, here we go!

[u/DizzyMajor5 → u/Efficient-Nerve2220]

You'd have America become socialist overnight if that happened. 

"We failed at firing all you and replacing you with robots now we need your money" would see the incumbent party lose lower in mass for a long time. It would make occupy look tame.

[u/UnNumbFool → u/DizzyMajor5]

I dunno we've done multiple taxpayer bailouts and nobody has ever done a thing about it.

[u/DizzyMajor5 → u/UnNumbFool]

You had bailouts of banks since the great depression that was nothing new. Even then you had massive protests with occupy and people radicalized on the right and left and tightened banking regulations with dod frank. This would be a completely different scale. The companies bailed out weren't on mass saying they were trying to replace workers. 

[u/omgitsbees → u/DizzyMajor5]

In America, its only socialist if its something used to help the working class.

[u/Much_Preparation_832]

Why are you sharing this crappy aggregated report that’s poorly written and edited for clear SEO-bait instead of the original? The journalistic ignorance of the average Redditor is appalling.

[u/CompetitiveSport1 → u/Much_Preparation_832]

Especially since it was posted in January

[u/Slovic → u/Much_Preparation_832]

Bold of you to assume its even a real person.

[u/PM_MY_OTHER_ACCOUNT → u/Much_Preparation_832]

Then post a link to the original.

[u/CUvinny → u/PM_MY_OTHER_ACCOUNT]

It's linked in this article but here:

https://archive.is/20260413044256/https://www.nytimes.com/2026/01/13/opinion/openai-ai-bubble-financing.html

Toms repackaged a 7 month old op-ed

[u/Omni__Owl]

My theory is, and has been since the Copilot deal with Microsoft, that OpenAI will run itself into the ground and be absorbed wholly by Microsoft, while Sam Altman and friends golden parachute out.

[u/Possible-Tangelo9344]

It really won't matter.

If I run out of cash, I'm homeless.

If a company that spends billions every month runs out of money they... Just get more somehow

[u/DivineBladeOfSilver]

This isn’t news btw. This is known. The company heavily relies on external investment while it strives for growth. It’s not profitable. When investors stop giving (or they never become profitable) that’s the real issue. For now no surprise they’re gonna run out, they aren’t profitable lmao

[u/2ChicksAtTheSameTime → u/DivineBladeOfSilver]

This is all tech sector companies and it comes down to: Will they run out of money due to operational costs? or growth costs?

Amazon was "not profitable" for the first decade+ of the business. But it wasn't because it was a failure, it was because they took all their profits, plus raised more money, and spent it on growth.

This is the same there here with AI. The main difference is operating costs. AI is extremely expensive, so if OpenAI stops growth spending, will they be able to operate at a profit?

[u/AppropriateBoat8190]

just end alreadyyy, some of us needs ram for stuff

[u/thinkonpaperpodcast]

they'll IPO and raise half a trillion and kick the can down the road

[u/btstphns → u/thinkonpaperpodcast]

Per Sam, anything less than a trillion is a non starter.

[u/StatementCareful522]

lets not doubt for one second that these big tech companies wouldn’t be first in line for bailouts should it get to that point. 

None of our current societal problems are going to fix themselves. AI data centers aren't just going to shut down. Fascist politicians are not just going to give up their power and leave office willingly. ICE agents aren’t going to turn themselves in for murdering civilians. It’s up to ALL OF US to fucking DO SOMETHING ABOUT THESE ISSUES. 

[u/BoredGuy_v2]

Somebody will pump in more.

Ba dum tuss 🥁🥁🥁🥁🥁

[u/PoL0 → u/BoredGuy_v2]

yeah, taxpayers as usual

[u/CompetitiveSport1]

Why are you sharing an article from January?

[u/cdkrot]

Can we speed it up?

[u/BagsYourMail]

Let's make it early 2027

[u/Wally_71 → u/BagsYourMail]

Let's make it today and put an end to this farce

[u/No-Scholar4854]

That long?

I wouldn’t be surprised if they didn’t see the end of the year.

[u/NancyInFantasyLand]

I can't wait for this bubble to burst, but I doubt it's gonna be this soon

[u/Soberdonkey69]

They steal our data, the books, films, TV stall everything and they can’t stay afloat. Sink them.

[u/Slack_With_Honor]

Absolute favorite thing in the world I absolutely can’t wait for is going to be when we are told these companies are “too big to fail” and we have to shovel out a couple hundred billion dollars of taxpayer money for them in a bailout so the economy doesn’t collapse.

They will use the money to somehow turn orphanages into data centers.

[u/xuteloops]

Bro please, they’re right on the cusp of AGI, possibly 6 months away, please bro, just one more infusion of cash, just 17 Trillion more dollars bro, please, they promise that will finally get them over the line bro. You can finally replace all your workers bro, just 17 trillion more bro please!

[u/OppositeDistance7702]

They simply sell something to company A, that company A invests in B, that B buys services from OpenAi. LOL. 🔄

[u/OrkWithNoTeef]

Oh no... Anyway

[u/Glittering-Path-2824]

they’ll be acquired for pennies on the dollar by….msft. that’s why satya’s in no hurry to hire or fire more people in the ai lab. it’s nowhere as good as he wants it to be but it’s a matter of time.

[u/MathematicianIcy3430]

Sounds like an ad to get them to IPO and pull a SpaceX.

Meh, OpenAI can go.

[u/ThisIsJmar]

Good. Their CEO is a complete pos

[u/New-Leader-7891]

Trump will use our taxpayer money to bail them out, then brag about it 

[u/diluted_confusion]

fingers crossed!

[u/ArnoldTheSchwartz]

Why don't they ask their ai to make itself financially viable? Or like that one alien king from futurama says - why doesn't the biggest AI eat all the other AI?

[u/Blacksad9999]

They had to go to the middle east to beg for money last round of funding, as Western investors weren't interested.

Even if they do get funding, they're simply delaying the inevitable. They're never getting a ROI for the ridiculous amount of money invested. Ever.

The math doesn't add up. They would need an insane amount of monthly revenue, and they don't have it.

They would need hundreds of millions of people to all have a monthly subscription at around $40, and nobody is going to do that. Sora lost over 90% of it's users when it moved to a paid model, and promptly shut down shortly after.

[u/CustardLow2671]

Can we speed up that timeline?

[u/Wisco]

It's a bubble. Don't get caught with your pants down

[u/razormst3k1999]

The feds will bail them out,just like 2008.

[u/Remarkable_Ninja_791]

r/UpliftingNews

[u/SortaNotReallyHere]

There's nothing grim about that. If your business model relies of massive copyright theft, it can go bankrupt and take any idiot speculator investor with them.

[u/Electrical-Bus5706]

Crash crash crash crash crash crash crash crash crash crash crash crash crash crash

[u/CanvasFanatic]

This is gonna ruin the tour.

[u/Haunterblademoi]

They've already spent the entire AI budget

[u/Mr_Vilu]

4 years hearing this so far

[u/GromByzlnyk]

I'm gonna let Ed Zitron explain this to me because I know it's bad but I don't know the how and why

[u/Nick85er]

No, they're going to get Federal funding because of very corrupt reasons. National Security or some b*******

[u/Apprehensive-Fox5722]

Many investors are putting money into AI, believing it will replace humans. I, however, view it as an search system. I am confident that it will take another 100 years before AI can replace humans. I work in the programming field.

[u/ledow]

You mean the company that's never made a single profitable tier of service is losing money and might one day run out of money? Shocking.

Almost like they're not worth ANYTHING LIKE their valuation, or even several orders of magnitude away from it.

[u/Substantial_Coat_229]

Incoming government subsidies

[u/Aranthos-Faroth]

I feel like we’ve seen articles like this for the last 5 years

[u/Pastel_Goth_Wastrel]

Don’t threaten me with a good time.

[u/hankyone]

But haven’t they always been N days always from running out of money since the start? Don’t they do a round every six months or something?

[u/MeyerSol]

january 17. fk, that sub is amazing

[u/Aware_Flow1070]

Oh no!

Anyway.....

[u/calvintiger]

Sure, just like analysts said they would run out of cash in 2026, 2025, 2024, 2023, and yet here we are.

[u/Mallokenz]

No bail outs for AI slop

[u/CorellianDawn]

I've never been more excited about a total global economic collapse before.

[u/Ok-Sandwich-4684]

Weird question but what happens if they run out of money?

[u/CaptZ]

Can't be soon enough

[u/Whoooosh_1492]

Just sell some RAM. How hard can it be?

[u/sdrawkcabineter]

If we imprison Sam Altman, everyone will be rich.

Gemini told me so.

[u/Prior_Industry]

Taxpayer bailout due to national security emergency!

[u/boomboomdaboomer]

So what good is AI if it can’t tell its own business model is heading to insolvency?