Elizabeth Warren asks OpenAI to promise they won’t ask for a bailout if they fail:

In a letter to CEO Sam Altman, Warren says she is concerned that the company is preparing to fall back “on the classic strategy of privatizing profits and socializing losses” amid soaring spending and growing fears of an AI bubble popping.

I like Elizabeth Warren and voted for her in the 2020 primary after my other favorite candidates dropped out. But I think she’s wasting her time here. If OpenAI fails, they fail spectacularly, and no bailout will help. They have gone all-in… and might actually win.

@manton I think you’re wrong here. Asking for a bail out (under the guise of AI underpinning a rocky US economy) is exactly what I expect all the AI CEOs would do. Remember, these same folks begged for SVB to be bailed out in the same breath they decried their employees talking about unions.

@ryant Maybe. I’m having trouble imagining what a bailout would even look like at this scale. If OpenAI and Nvidia crash, there’s no obvious fix except to weather the storm, in my opinion.

@manton I agree that it’s not clear what the remedy is (or that there would even be a bailout), but I think that the Intel deal may have set a precedent here, and these CEOs would absolutely ask (and, arguably, be stupid not to)

@manton the company is so overstretched, as are many others in this game, like Oracle and datacenters, I don’t know how OpenAI “wins” anything. They’ve made ridiculous promises in how much they are going to spend, even with Microsoft. The only frontier model player right now that is already built to do this is Google. Maybe toss Microsoft in there as well but I don’t see anyone talking about how great Copilot is.

@jkratz In my post, “win” means “does not declare bankruptcy”. 🙂 There’s really no precedent for any of this. $0 to $20 billion run rate in a few years. I think we’ll know later this year if the crazy investments and debt were worth the risk or if it all falls apart.

@manton What does winning look like? Open models are advancing quickly, and they also have strong competitors now in Anthropic and Google. Google in particular seems much better positioned to come out of this with a strong AI business without a ton of debt.

OpenAI failing and getting bailed out because of national pride seems likely to me, like where Intel is now I guess.

@stevex If OpenAI has strong competition (and I agree they do!) then why bail them out? To me, either AI can be a sustainable business or it can’t, and no single company is going to change that. I’d be more worried about “all our eggs in the Nvidia basket” problems.

@manton I expect they'll get to a point where they're profitable minus debt payments, but they'll have tens or hundreds of billions of dollars of debt. Somehow Google got there with their own chips and (I think) much less debt.

@manton why? because its a billionaire circlejerk including those in government 😂

@manton
I know you're pro A"I", but let's agree to disagree on this one. OpenAI, is going to go down with the rest of em.