The OpenAI Bubble

Thanks for reading this week’s free Where’s Your Ed At newsletter. As I said last week, I’m taking the rest of this week off, so there won’t be a premium on Friday. That said, if you aren’t already a member, now’s a great time to subscribe.

To celebrate the one year anniversary of the premium newsletter, I’m offering a sale on one-year subscriptions. Between now and midnight July 22, you can get a permanent annual rate of just $60— a $10 discount on the usual price of $70 - for life. Click here for the offer.

In addition to getting access to the entire back catalog of premium posts, you’ll also receive one additional post each week — usually anywhere between 10,000 and 20,000 words — covering the most pressing topics in the AI bubble - the best value in tech analysis. Highlights include last week's Hater's Guide To The Memory Crisis - a guide to how AI made everything more expensive - How OpenAI Kills Oracle (which pairs nicely with the Hater's Guide To Oracle ), The Hater's Guide To NVIDIA, The Hater's Guides To Private Credit and Private Equity, and how the entire AI Compute Demand Story Is A Lie.

Today’s piece is one of the largest free newsletters I’ve ever written, and pulls together the last six months of my work.

And it all starts with a question: how much do you trust Sam Altman? The stock market and (to some extent) the global economy rests on your answer.

You see, OpenAI has become one of the largest liabilities in recent economic history. You can argue that OpenAI’s no longer the focal point of the AI bubble — you can talk all you want about open source models or Anthropic or any number of other elements — but without OpenAI, the AI industry doesn’t exist, and the justification for trillions of dollars of capex evaporates.

The AI bubble isn’t a result of any actual return on investment — whether that be in purely monetary terms, like revenue or profitability, productivity gains, or anything tangible or measurable. Rather, it’s an episode of cult-li…