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.
Q2/Q3 2027 that’s been my bet and will be my bet. Finance breaking down takes time, there are so many ways you can bail water.
What do you think gets triggered then? Is it just the ability to drag out consequences?
That date is when the majority of the loan obligations and investors returns come due. If they don’t have their profits by then (which they won’t) they essentially have to liquidate.
Its why you are seeing all of the AI companies try to go public right now, even though the timing is bad and the market isn’t ready for it. The AI bros want to get their bags before it all unwinds.
Also the date when most AI startups run out of runway with VC money, therefore no more money to Anthropic. Seriously, some of those startups are planning on AI thinking up a profit strategy. Watch the store shelves for powdered water.
Lol I haven’t heard about that. What company is or is planning to do that?
Various permutations of that joke have been floating around since dehydrated food hit the market
OK. ty. To be fair, $11b does buy them 3-4 months of burn. Any part of $9b that can stay open for those 3-4 months, is up to another 3 months of burn. They have to IPO after, because another private round below $1.25T triggers massive penalties to early investors. That does get us to Q2. I see a panic close on that $11b before anyone can walk away, as causing an immediate massive spiral down.