The opening stages of OpenAI’s unraveling, which I first warned about in January 2024 (if not before), have begun.
To begin with, hardly anyone trusts them anymore, which can’t be great for business.
Take the reaction to OpenAIs Sam Altman’s latest announcement, on Tuesday August 18 (i.e., “earlier today” for those of us on the West Coast), that OpenAI would be pausing, ostensibly for safety reasoning:
As far as I can tell, hardly anyone believed him.
The best one line translation came from the user @NIK on X:
Slightly elaborated:
And, here’s where things get worse. It turns out people were very likely right to be skeptical, because The Wall Street Journal’s Berber Jin and Corrie Dribusch just dropped big news:
and then an hour and half later, Jin dropped still further details, also bad for OpenAI:
You don’t want your quarterly losses to quadruple right before your IPO.
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It’s safe to say all this is good news for Anthropic:
And terrible news for OpenAI.
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Small wonder Nvidia was trying to cover its bets earlier this week:
Still, as Ed Zitron and I have both long noted, if OpenAI goes down the damage could spread:
In short, things could well get wild, very soon.
Sorry - I spoke too quickly. It is also good for anyone who didn’t want a massive datacenter located in their community. And those who on principled grounds oppose massive misallocations of scarce resources; monetary or otherwise.
Well, it isn’t actually ‘good’ news for Anthropic as it only hammers home the point that there isn’t a sustainable and profitable market available to MAMLM/GenAI based labs. If OpenAI falls, then the illusion sustaining the entire industry shatters. First the hardware companies and the neoclouds are crushed, with many going bankrupt entirely. Then the remaining labs go under as the venture capital and circular financing dry up. This isn’t ‘good’ for anyone. Well, anyone who doesn’t own puts on Coreweave, SoftBank, or Oracle.