Hot take on an AI catfight
Yesterday OpenAI announced a huge infrastructure project, partly framed as pushing the U.S. ahead, and Elon had words for Sam.
OpenAI’s announcement began “The Stargate Project is a new company which intends to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United … not only support[ing] the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies.”
Trump announced the project yesterday, and then Elon replied, questioning the announcement’s finances:
OpenAI was born on a public claim of a billion dollars funding, but from gossip I have heard, it was a long time before they saw their first billion; initial funding was far less; from what I understand likely $100M or less.
Elon thinks Sam is playing the same move that they once played together. He could be right. Neither is known for absolute candor.
Either way, Sam assumed (or alleges) the $100B (or whether the real number turns out to be) will be “great for the country”.
Like a lot of what Sam says, this is based on the conjecture, or in this case multiple conjectures:
The entirely speculative conjecture that LLMs or something else OpenAI figures out how to be build will be enormously profitable. So far the infrastructure field wide (250B, perhaps) has enormously outweighed total revenue, perhaps 50:1.
The entirely speculative conjecture that any profits will actually do much to help the American people, as opposed to just enriching those who own that infrastructure. Yes, some people will be employed building data centers; but if the data centers work towards better AI, many others will lose their jobs. Net effect is entirely unclear. And then there is the immense environmental cost.
The equally speculative conjecture that the U.S. will long term have an advantage over China if the U.S. builds the hypothesized infrastructure, as if China isn’t trying to build the same. On LLMs China is already catching up.
Stay tuned for more drama!
Gary Marcus is writing from Davos.
So we've got Masayoshi Son, who lost over $50 billion during the dot com crisis. This should be understood as: "this man has no fucking clue about the future, he just gets hyped easily and throws money like it's shit at a wall". Softbank's market cap is around $100 billion.
Then we've got Sam Altman, who, c'mon, we should know is a cunning liar whose whole shtick is that his face always looks concerned, and this tricks idiots into thinking he's NOT one of the bad guys exploiting humanity. Open AI is valued at around $150 billion and had an operating loss of $5 billion in 2024, projected to something like $30 billion by 2028.
Finally, Larry Ellison of Oracle, market cap $400 billion. Maybe the only credible person in the room, I'm not sure I don't know about him.
These three are supposed to invest $400 billion in America. These are the men who, we are told, have the trust of investors to gather that money. On the one hand, it's ludicrous and laughable. On the other hand, investors have piled so much into AI on this hype train that I think it just might work. It's pathetic. We should be building homes.
"Neither is known for absolute candor" is a very generous way of putting it.