The AI Free Ride Showing Signs Of Coming To Its End

A major story by WSJ revealed that OpenAI missed key revenue and user targets. I am starting to wonder what scenario would cause an AI bubble if there was one, and the answer lies in whether or not financial projections keep up with the debt loads being taken on to build out data centers. It doesn’t take much for debt to move downscale in the ratings nowadays, and a downgrade equals higher interest rates, which are a death knell for massively leveraged businesses. What happens if OpenAI borrows all of this and we find out the datacenters built have a five year shelf life?

We all know that AI is mostly comprised of massive amounts of compute doing work in the most inefficient way possible, which isn’t a big deal when compute is available and low cost. I do question how important missing these measures are though, these were internal, and may just have been “pie in the sky/reach goals” and nothing they thought they actually could do. However, what if their growth is flatlining? What if those were real goals? Is the IPO just a way to deleverage? What is their actual runway?

We know OpenAI killed Sora to save compute costs and cut expense, but what about the story that GitHub Copilot is moving to usage based billing? There seems to be some weird news coming out. Is the AI free ride coming to end? Are us common everyday folks who use AI going to wake up to a $4000 bill one day?

The only solution to all of this is going to require some kind of breakthrough in compute that is cheaper, has a longer shelf life, easier to produce, and light on utility cost. What is the timeline for that?