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.
When the bubble bursts, will the components really go back to pre-bubble prices?
no because inflation, but the price will probably fall to what it would naturally grow to if the bubble didn’t exist.
datacenters need to be cancelled, or more specifically NVidia GPU orders cancelled. Then ddr5/6 ram can be made instead. gddr ram too. If OpenAI implodes (they absolutely need cash f’n now not to), there is no way that huge cancellations of Nvidia GPUs don’t happen.
They will be below prebubble prices for a short while while things rebalance. But, no, not long term, at least not for quite a while.