Anthropic CEO Dario Amodei criticized moves like this, saying that some of his company’s rivals are pushing infrastructure investments too far. However, OpenAI says that it’s ahead of the exponential compute curve, allowing it to have an advantage over everyone else. For example, Anthropic has had to limit access to some features on its various products due to limited resources, and Amodei has had to spend more on securing capacity to satisfy the increasing demand
The biggest difference between startups, like OpenAI and Anthropic, and their more established rivals, like Microsoft, Google , Meta, and Amazon , is cash flow. The startups still rely on external funding to fuel their growth, while the big tech companies have billion-dollar revenue that they can rely on to pour into expensive hardware and infrastructure projects.
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Jowi Morales is a tech enthusiast with years of experience working in the industry. He\u2019s been writing with several tech publications since 2021, where he\u2019s been interested in tech hardware and consumer electronics. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-22/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Jowi Morales Social Links Navigation Contributing Writer Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.
rluker5 This story works well with this recent one where OpenAI cut its exclusivity with Microsoft so it could use other companies' servers: https://www.tomshardware.com/tech-industry/microsoft-and-openai-end-exclusivity-agreement-opening-up-potential-partnerships-with-amazon-and-google-microsoft-will-continue-to-receive-revenue-share-through-2030If OpenAI can contract out their computing needs everywhere, it makes contracting out their computing needs easier. And perhaps OpenAI couldn't find a way to make dedicated servers profitable for their uses or found funding difficult so they pass these problems on to some other companies. But what does that mean for this old funding circle: https://substackcdn.com/image/fetch/$s_!F_Nk!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F442cdfc2-1561-4207-b487-466517454b9f_800x815.jpegI know there must be newer versions but this one still shows the importance of OpenAI buying hardware. Just renting it changes a lot of things. Also, I may be looking in the wrong places so maybe I'm getting a skewed image (also I'm old enough to remember getting free dialup, so that can't help) so I'm tossing this under a spoiler https://www.visualcapitalist.com/wp-content/uploads/2025/04/How-People-Use-Gen-AI-in-2025_Site.jpgIf this is what is driving revenue from personal use then all of the revenue must be coming from professional uses whatever they are. This is basically a list of worthless stuff that few would miss if they had to pay for it. Edit: Concerning this list: some older among us might remember when search engines focused on giving us the best results we asked for quickly, before they became more profit oriented. I see no reason to believe that the same won't happen with AI. Reply
SSGBryan rluker5 said: But what does that mean for this old funding circle It means Oracle is screwed. Reply
das_stig Oh please let the Ai bubble burst badly and see this whole fragile house of cards come crumbling down, all the big players lose billions and the greedy investors who threw money at them! They are in no small part responsible for whole energy price crisis and resource shortages! Reply
Marlin1975 das_stig said: Oh please let the Ai bubble burst badly and see this whole fragile house of cards come crumbling down, all the big players lose billions and the greedy investors who threw money at them! They are in no small part responsible for whole energy price crisis and resource shortages! I want it to burst as well but interest rates are still generally low so the "free" money is still coming in. OpenAI just got another 100+ billion round of funding. They are able to do this as these AI/Hardware stocks keep going up so they can use them to fund other AI that causes their stockl to go up and so on. My bigger worry is a LOT of 401ks are tied up in this as well. You losing half of 250k is worse than going from 4 billion to 2. Reply
bit_user Marlin1975 said: I want it to burst as well but interest rates are still generally low so the "free" money is still coming in. OpenAI just got another 100+ billion round of funding. That closed at the end of March, so it won't have accounted for news that's come out since then. And don't forget that Musk's lawsuit against OpenAI is now in the testimony phase. Marlin1975 said: My bigger worry is a LOT of 401ks are tied up in this as well. You losing half of 250k is worse than going from 4 billion to 2. Depends on how you have it allocated. First of all, I think 401(k)'s can't invest in startups? I think they're usually limited to more traditional securities, like stocks and bonds. But, let's say you invested it aggressively and that means it's got a bunch of Nvidia, Meta, Microsoft, Oracle, and Google in it. So, yeah, you'd still be pretty heavily exposed. Reply
FoxtrotMichael-1 das_stig said: Oh please let the Ai bubble burst badly and see this whole fragile house of cards come crumbling down, all the big players lose billions and the greedy investors who threw money at them! They are in no small part responsible for whole energy price crisis and resource shortages! Unfortunately this perspective is naive at best. People who are removed from the tech industry don’t really understand how transformative this technology is. I build AI agents professionally and most people are shocked at how much money companies are willing to spend on tokens. Even medium sized corps are spending $1M a month on tokens and willing to go higher for the productivity gains. Many technical teams will never give up their newfound agentic coding practices. What I’m saying is that reports of a “bubble” are highly exaggerated by people who, frankly, just have no idea what’s going on. Will the investments slow down and the build-out slow? Absolutely. Will some of the players currently overvalued in the build-out space lose half of their valuation? Probably. But the idea that the bubble will burst and everything will go back to normal is just a pipe dream. Reply
SSGBryan bit_user said: Depends on how you have it allocated. First of all, I think 401(k)'s can't invest in startups? I think they're usually limited to more traditional securities, like stocks and bonds. But, let's say you invested it aggressively and that means it's got a bunch of Nvidia, Meta, Microsoft, Oracle, and Google in it. So, yeah, you'd still be pretty heavily exposed. You don't have to be aggressively invested. Anything that is showing any growth has a lot of this. You don't even want to think about index funds that are built around things such as the S&P 500. I have been digging through the "safest" index funds that are supposed to be relatively "safe" from wild swings, like dividend index stock funds. Almost ALL of the stock growth in the S&P 500 over the past 4 years is due to the "magnificent seven". They go south and everything goes down. Reply
das_stig FoxtrotMichael-1 said: Unfortunately this perspective is naive at best. People who are removed from the tech industry don’t really understand how transformative this technology is. I build AI agents professionally and most people are shocked at how much money companies are willing to spend on tokens. Even medium sized corps are spending $1M a month on tokens and willing to go higher for the productivity gains. Many technical teams will never give up their newfound agentic coding practices. What I’m saying is that reports of a “bubble” are highly exaggerated by people who, frankly, just have no idea what’s going on. Will the investments slow down and the build-out slow? Absolutely. Will some of the players currently overvalued in the build-out space lose half of their valuation? Probably. But the idea that the bubble will burst and everything will go back to normal is just a pipe dream. as I work in finance I see what Ai is doing and it's frightening how much relies on it to get it right, which of course relies on the coding and formulas and even that isn't guaranteed to be human, if any left being employed with that level of skill and intelligence, as the god like fat cat bosses drive to replace anybody and everybody with a bot, even senior management are not safe. Reply
Marlin1975 bit_user said: That closed at the end of March, so it won't have accounted for news that's come out since then. And don't forget that Musk's lawsuit against OpenAI is now in the testimony phase. Depends on how you have it allocated. First of all, I think 401(k)'s can't invest in startups? I think they're usually limited to more traditional securities, like stocks and bonds. But, let's say you invested it aggressively and that means it's got a bunch of Nvidia, Meta, Microsoft, Oracle, and Google in it. So, yeah, you'd still be pretty heavily exposed. Yea those, plus Hynix, sandisk, etc…, are all over the Top 100 S&P. And vastly overpriced IMO. I think it was over half of the S&Ps growth is due to just 10 stocks. The point of the S&P was the "don't put all your eggs in one basket" but I think even thats broken now. Reply
SSGBryan Marlin1975 said: Yea those, plus Hynix, sandisk, etc…, are all over the Top 100 S&P. And vastly overpriced IMO. I think it was over half of the S&Ps growth is due to just 10 stocks. The point of the S&P was the "don't put all your eggs in one basket" but I think even thats broken now. It is. Remove the "magnificent seven" and the S&P 500 flat lined four years ago. Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/artificial-intelligence/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/artificial-intelligence/openai-has-effectively-abandoned-first-party-stargate-data-centers-in-favor-of-more-flexible-deals-company-now-prefers-to-lease-compute-and-says-stargate-is-an-umbrella-term#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.