Great coverage on how the success of so much of the AI bubble relies upon the ability of loss making OpenAI to burn through absolutely colossal amounts of money while being completely unprofitable. Any hiccup in that money burning and the hit to the rest of the AI ecosystem will be very significant.

And lets remember that the Chinese open source / low cost AI strategy has rendered the OpenAI expensive guarded proprietary castle strategy non-viable already.

“It's also important to note that absolutely nobody other than NVIDIA is making any money from generative AI. CoreWeave loses billions of dollars, OpenAI loses billions of dollars, Anthropic loses billions of dollars, and I can't find a single company providing generative AI-powered software that's making a profit. The only companies even close to doing so are consultancies providing services to train and create data for models like Turing and Scale AI — and Scale isn’t even profitable.

The knock-on effects of OpenAI's collapse will be wide-ranging. Neither CoreWeave nor Crusoe will have tenants for their massive, unsustainable operations, and Oracle will have nobody to sell the compute it’s leased from Crusoe for the next 15 years. CoreWeave will likely collapse under the weight of its abominable debt, which will lead to a 7%+ revenue drop for NVIDIA at a time when revenue growth has already begun to slow.

On a philosophical level, OpenAI's health is what keeps this industry alive, and this entire hype-cycle has been driven by its success, meaning any deterioration (or collapse) of OpenAI will tell the market what I've been saying for over a year: that generative AI is not the next hyper-growth market, and its underlying economics do not make sense.”