A startup that has never turned a profit and generates annual revenue equivalent to just two per cent of Amazon’s sales has become so entangled with America’s tech giants that its failure could threaten the part of the US economy that is keeping the nation out of recession, with analysts comparing the systemic risk to the 2008 financial crisis.
The concerns emerge as OpenAI reaches a $500 billion valuation through complex deals with tech giants, reports The Wall Street Journal.
Chief Executive Sam Altman has engineered partnerships in which companies, including Nvidia and Oracle, invest in OpenAI while committing to substantial future purchases. Microsoft will hold a 27 per cent stake following the startup’s latest reorganisation, with Nvidia announcing plans to invest $100 billion. These interconnected deals echo the complex financial instruments that led to the collapse of banks in 2008-09.
“An economy that’s over $30 trillion in debt needs the productivity boost that AI is going to give us,” said tech investor David Sacks, now White House AI czar, on social media years before his appointment.
Breaking up OpenAI
Senator Bernie Sanders called for breaking up OpenAI and ChatGPT despite the company expecting to generate just $13 billion this year, telling Axios about AI: “We need to take a deep breath and understand that it’s like a meteor coming to this planet—we gotta be prepared to deal with it in all of its complexity.”
Critics compare OpenAI’s rise to tulip mania and the dot-com bubble, noting that few worried when Pets.com failed during the internet boom. Supporters argue that it represents a once-in-a-generation opportunity to disrupt smartphones, social media, search engines, and robotics simultaneously.
The startup’s future depends entirely on delivering “godlike artificial intelligence” that might cure cancer and transform work, with Altman tweeting years ago: “I think AGI is probably necessary for humanity to survive.”
