Sam Altman calls AI a “bubble” while seeking $500B valuation for OpenAI
"Someone will lose a phenomenal amount of money," says CEO while fundraising at record prices.
https://arstechnica.com/information-technology/2025/08/sam-altman-calls-ai-a-bubble-while-seeking-500b-valuation-for-openai/?utm_brand=arstechnica&utm_social-type=owned&utm_source=mastodon&utm_medium=social
"Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes," Altman told the journalists, comparing the current market to the dot-com crash of the 1990s. Wired reported that he also predicted his company will spend "trillions of dollars on data center construction in the not very distant future" and that ChatGPT will soon serve "billions of people a day."
For context, Facebook serves about 3 billion monthly active users. Altman's projection would require ChatGPT to reach nearly half the world's population as daily users (not monthly, like Facebook), which is an extraordinarily optimistic outlook...
The apparent contradiction in Altman's overall message is notable. This isn't how you'd expect a tech executive to talk when they believe their industry faces imminent collapse. While warning about a bubble, he's simultaneously seeking a valuation that would make OpenAI worth more than Walmart or ExxonMobil—companies with actual profits. OpenAI hit $1 billion in monthly revenue in July but is reportedly heading toward a $5 billion annual loss. So what's going on here?
The current AI investment cycle differs from previous technology bubbles. Unlike dot-com era startups that burned through venture capital with no path to profitability, the largest AI investors—Microsoft, Google, Meta, and Amazon—generate hundreds of billions of dollars in annual profits from their core businesses.
Microsoft alone plans to spend $80 billion on AI data centers this fiscal year. These companies can potentially sustain losses from AI development for years without facing the cash crises that typically trigger bubble collapses.
