- cross-posted to:
- usa@lemmy.ml
- cross-posted to:
- usa@lemmy.ml
Alright, let’s break down why this whole OpenAI situation is a five-alarm fire of pure, unadulterated bullshit. Sam Altman is running what is essentially the world’s most expensive and dangerous confidence game, and everyone in the media and tech world is just nodding along.
First, let’s talk about the sheer, mind-boggling scale of the promises. OpenAI, a company that is hemorrhaging cash, has committed to building 250 gigawatts of data center capacity by 2033. To put that in perspective, the entire global data center capacity right now is about 55GW. So Altman is promising to build almost five times the entire world’s current infrastructure in just eight years. The cost for this fantasy? Roughly $10 trillion. That is not a typo. That’s one-third of the entire US GDP. It’s a number so large it becomes meaningless, like a child saying they want a billion ice creams.
Now, let’s get into the immediate, short-term insanity. In the next year alone, to even begin fulfilling the deals they’ve announced with Broadcom, NVIDIA, and AMD, OpenAI needs to secure about $400 billion. Let that number sink in. That’s more than the total global venture capital raised in all of 2024. It’s more than five times what Amazon spent to build AWS. And they need this cash almost immediately because building a single gigawatt data center takes years and billions of dollars upfront. There’s also no evidence these data center projects have even broken ground, making the promised 2026 deployment dates a physical impossibility.
The financials are even more horrifying. OpenAI is burning money at a catastrophic rate of $6.7 billion on R&D in just six months, with a huge chunk of that spent on research for models they never even released. Their revenue is a fraction of their costs, and they’re on track to spend $40 billion on compute contracts alone. It’s a monstrosity that threatens to suck all the oxygen out of the Western financial system, requiring trillion-dollar annual investments that would eclipse global private equity deals.
The whole house of cards is built on blatant lies and market manipulation. Some verifiable lies include Altman claiming they magically acquired 1.7GW of capacity from nowhere (which is equivalent to all the data centers in the UK) and promising deployments in locations that don’t exist.
It’s a scam of historic proportions that will inevitably collapse and take the market down with it.
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Meanwhile deepseek prob doesn’t even need 1% of that money. (Being REALLY generous when I say 1%.)
And it’s a great illustration of the fact that OpenAI is nothing more than a ponzi scheme. If a small team is able to keep up with a company that needs astronomical sums of money to operate, it’s pretty clear that the money isn’t being used wisely.
The way I understand it, the actual cost could be multiple times higher, as within just a couple years there’s massive maintenance costs to consider: replacing hardware due to continuous use, upgrading hardware to meet new technical demands, constant maintenance of infrastructure to ensure safe and continuous operation (air-conditioning and wiring being two big ones). Within 8 years, they’ll probably need to pay just as much to maintain the data centers built in the beginning.
Yeah, I recall reading about this recently that operating costs can very easily balloon to eclipse the initial costs.
Tech bros: “In a gold rush, I am going to sell shovels! Now where can I source the most expensive shovels possible?”
Wall St investors : “Can I invest in your brilliant idea? The rest of the economy is shit for some unknown reason.”
The whole thing with Nvidia round-tripping cash between them and OpenAI and all the associated companies makes me very uneasy.
I have been pulling out of the S&P500 in accounts that I had put my savings into, since I really can’t stomach the risk right now. I’m not touching anything in my retirement accounts but for my savings I’m moving into things with less risk until this whole thing resolves itself
It’s very clearly a ponzi scheme of heroic proportions. Given that the whole AI industry is what’s propping up the market, I can’t see how the US avoids a dotCom style crash at this point. I would imagine bonds would be the safest thing to hold since they won’t crash like stocks.
Agreed. My only concern was that the bond market, despite claiming to not be correlated with stocks, could still get hit hard when this bubble popped. I had to go and look at VBTLX 's historical prices to see if it was indeed the case, and it doesn’t seem to be correlated, but also it obviously loses out on quite a lot of gains compared to stocks.
So, I do agree that moving into bonds is the right choice for some of my funds, so that I have some safety. The rest I will probably move into smaller cap or value stocks and avoid exposure to TSLA and NVDA. Basically, I was very invested in SPY for a long time and I made great gains, but some things in my life are changing in the next couple of months so I would like to reduce my risk for all my non-retirement funds.
Boring, privileged shit but thanks for letting me vent
Yeah, I’m looking at this stuff as well as my retirement is also being gambled with on the stock market here in Canada. So totally understand your frustration. Minimizing exposure to tech stocks definitely seems like a really important thing to do right now. Another thing I figure with bonds is that they would be bailed out before anything else, so you’d lose out on growth but at least your savings won’t get vaporized. As frustrating as this all is, at least we know what’s coming in the near future. I feel bad for people who don’t realize their savings are about to be wiped out.
So, at least for my retirement accounts, I’m fine with being exposed to the market via stocks and SPY. I am old, but not old enough where I will be touching any of that soon. So, I don’t really care what happens to those accounts right now. I would take the same perspective for yours.
It’s the accounts that I am going to draw from in the next year that I’m de-risking.
Yeah that makes sense, stuff that you won’t be touching for a while will eventually sort itself out.
