artsanel

Let me put it bluntly: If tomorrow OpenAI releases the finest video generator, the sharpest image creator, the most capable general text LLM, the strongest programming model, the deepest reasoning system, and they unveil top-tier music production, they're still finished. They cannot survive this atmosphere.

OpenAI will become the first company with a valuation exceeding $500 billion to collapse without ever reporting an annual profit.

WHY?

Even if they seize the crown tomorrow, at the current rate of AI improvement, they'll maintain their lead for roughly two months. Maybe three if luck smiles. Then comes the inevitable descent: 6 to 9 months as the technical underdog, hemorrhaging cash without generating profit, while their debt mounts to staggering heights.

Cast your mind back to 2023. OpenAI dominated. Yet the tendency since then tells a darker story, an increasing swarm of competitors has methodically closed the gap. Recently, several have surpassed them entirely.

The projection is what seals the coffin. That's why no ace hidden up their sleeve will save them. Even if such a card exists, its advantage will prove fleeting.

OpenAI cannot maintain leadership across nearly every domain. Yet they must to justify their astronomical valuation and theoretical capacity to service their debt. This creates a paradox: They also cannot excel at any single thing, because resources get diluted across multiple fronts to maintain the illusion. They lack the ability to concentrate where they might actually dominate.

But isn't OpenAI the best at heavy reasoning in early 2026?

I said OpenAI leads in nothing meaningful at this point. Sure, certain benchmarks show them ahead in complex reasoning tasks. So what? What they've truly mastered is burning investor money.

Their approach? Throw nearly unlimited computational resources at extended thinking sessions (30+ minutes), consuming massive amounts of power, incinerating those Benjamins to claim a pyrrhic victory. The economics don't work; user subscription fees cannot cover these costs. Not even close.

No, they have no genuine lead other than capital. And that lifeline is fraying rapidly.

The Deals That Were Too Good to Last

OpenAI supposedly had a killer arrangement with Nvidia. You give me your money, and with your money I'll buy your expensive hardware. OpenAI had no qualms with this cycle; they could theoretically repeat it infinitely. But Nvidia CEO Jensen Huang recently emerged and essentially declared that deal worthless. No more free money flowing their direction.

Then there's Microsoft. Surprise: they had an even sweeter arrangement. I'll give you my money, and with my money you purchase my massive Azure cloud computing infrastructure and data center services. Plus, I'll pay you for the AI capabilities I'm funding. Beautiful, right?

More recently, though, Microsoft appears to be distancing itself from OpenAI, announcing plans to develop its own models. The umbilical cord is being severed.

Update: The Final Lead Vanishes

They just lost their last remaining advantage in "heavy reasoning" and the race toward AGI (achieved primarily through wasteful resource allocation). Gemini 3 Deep Think claimed the throne, with Claude Opus 4.6 Thinking close behind.

They're done.

I originally titled this piece "RIP 2015-2026," but opted for a slightly more conservative timeline. Call it mercy.

#OpenAI #Collapse #Debt #AI #ArtificialIntelligence

When you restrict access to powerful AI hardware to a country of 1.4 billion people, highly educated, hard workers, great at math and coding, what outcome could you expect?

Turns out, the answer is more efficient software. And its name is Deepseek.
Sounds great!, unless you are a country where your biggest companies make AI hardware.

The U.S., home to tech giants like Nvidia, AMD, and Intel, has built much of its recent economic growth on the booming demand for AI chips. But with China’s breakthrough in creating Deepseek, a smarter, leaner AI that requires less hardware, the tables could turn.

How Sanctions Sparked Innovation

The U.S. government’s decision to ban the export of advanced AI chips to China was intended to slow down China’s AI development. Instead, it had the opposite effect. Faced with limited access to cutting-edge hardware, Chinese researchers and engineers doubled down on software optimization.

Deepseek is not new, but its latest models, Deepseek-v3 and Deepseek-R1 with 685B parameters, have surpassed OpenAI available models GPT-4o and GPT-o1, while using much less resources to train.

What now?

Nvidia stock is down a 15% since Friday. But what will all of this entail for the average consumer?
If Nvidia cannot sell AI machines at a 1.000% profit, this could mean the return of affordable and cost effective consumer GPUs!
That’s all good news, granted that this does not spark a bit of a crisis, and you are not fired from your IT job or your S&P500 investment plummets.

Despite the potential financial shake-ups, there’s a bright side to all of this: we’re likely to see a surge of better, more advanced open-source AI models in the coming months. Organizations around the world, inspired by breakthroughs like Deepseek, will push the boundaries of what’s possible, and that’s something everyone can benefit from.

#Deepseek #OpenAI #LLM #Nvidia #GPT