Roughly 24 hours ago, OpenAI CEO Sam Altman first published a long blog post to celebrate 2 years since the launch of ChatGPT (Blog Post), then shortly after, this post appeared on X:
This post is the incredible confirmation of what we observed two weeks ago in “MICROSOFT CEO KNOWS HIS REVENUES ROUND-TRIPPING SCHEME IS FALLING APART AND IS PREPARING TO CONTAIN THE DAMAGES“. Yet, incredibly, many people are still turning a deaf ear to all the alarming bells sounding around OpenAI. There was also another thing we discussed at that time:
“Unfortunately for Satya, he can’t simply stop buying GPUs and pretend everything is fine. Why? This would inevitably crash NVIDIA GPU prices, ultimately impacting the value of tens of billions of USD in CAPEX recorded on Microsoft’s balance sheet”
No one who read the article I published in December should have been surprised about this Microsoft announcement a few days ago: Microsoft expects to spend $80 billion on AI-enabled data centers in fiscal 2025
Basically, on one side, we have OpenAI running a totally unscalable business and burning cash at an incredible speed (OpenAI says it needs ‘more capital than we’d imagined’ as it lays out for-profit plan). On the other side, we have Microsoft pledging another truckload of resources (don’t be fooled, most of them will be Azure credits, not real cash) to scale up the infrastructure to serve an unsustainable business model. How is it possible that pretty much nobody out there understands what’s going on here? Isn’t it obvious by now how Microsoft is running a biblical revenues fabrication scheme to keep its valuation at beautifully inflated levels (THE SMOKING GUN THAT PROVES HOW OPENAI IS MICROSOFT’S REVENUES LAUNDROMAT)?
Another thing that blows my mind is reading about those saying that OpenAI turning itself from a “no-profit” organization into a “Public Benefit Corporation” (not a joke) would have any impact on its unsustainable business model. Its model becomes more precarious every day due to fierce competitors like xAI, Google, or Meta, who are building equivalent, if not superior, products on much leaner infrastructure that definitely stands higher chances of turning a profit while scaling up (while OpenAI loses more money as more paying users subscribe to its products as per its own admission).
The only ones that stand to gain from OpenAI turning itself into a PBC are those investors, among which Microsoft is by far the biggest, who are desperate to bring OpenAI to IPO and cash out their investment before the whole scheme falls apart once the company inevitably runs out of cash – which has clearly nothing to do with “public benefit”. This could happen soon, considering that a significant chunk of cash pledged in the last round is tied to the condition of OpenAI turning itself into a corporation: There’s a catch in OpenAI’s $6.6 billion funding deal.
Make no mistake, the end of this incredible saga is already written, and the consequences for all those companies and executives that participated in the scheme are going to make the ones faced by the likes of WorldCom, Global Crossing, and Enron look like children’s play.
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