OpenAI's Momentum is Spiraling Down ▼

OpenAI isn't IPO ready when compared to Anthropic, and that's a credibility problem. Remember, OpenAI is roughly 5 years and 3 months older than Anthropic.

Image by Wired.

Good Morning,

I’ve been following the Elon Musk trial vs. OpenAI and Sam Altman and there’s reason to believe OpenAI is on a downward spiral. To put it bluntly, OpenAI’s momentum has now been overtaken by that of Anthropic, Google and other AI labs. I’m not sure how it rebounds from this. In terms of LLMs and AI products this is how I see the ecosystem and companies with positive momentum and who are falling behind.

It took me many hours and many days to compile this, so I hope you enjoy it. Pre IPO for the biggest three AI IPOs in history in Anthropic, SpaceX and OpenA, it’s sort of a big deal.

Who’s Hot 🔥

• Anthropic

• Anysphere (Cursor)

• Google

• DeepSeek: aiming to raise up to $7.35 billion (50 billion yuan) at a valuation potentially reaching $50 billion.

• Moonshot AI: $2 billion in a new funding round.

Who is Not 🤯

• OpenAI: credibility loss, investors doubts and scaling back compute

• Microsoft: lagging in internal models and reputation

• Meta: poor execution and exodus of talent

• Amazon

• Apple

OpenAI’s has Executed Poorly and No longer has a material Compute Advantage

OpenAI’s leadership credibility and reputation is also taking a hit from the legal case against them that is being reported on by the media in detail. While Google and Anthropic have executed well in their Generative AI efforts, OpenAI has fumbled their priorities while losing considerable marketshare over the last year. Anthropic’s historical May 6th, 2026 deal with SpaceX AI (formerly xAI) for compute means Anthropic is no longer behind in compute. Anthropic signed an agreement with SpaceX to use all of the compute capacity at their Colossus 1 data center.

Claude@claudeai

We’ve agreed to a partnership with @SpaceX that will substantially increase our compute capacity. This, along with our other recent compute deals, means that we’ve been able to increase our usage limits for Claude Code and the Claude API.

4:19 PM · May 6, 2026 · 23.5M Views

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4.74K Replies · 12.1K Reposts · 131K Likes

OpenAI Talent Exodus Continues

OpenAI keeps losing key talent and this week it was head of private equity Paul Zimmerman, who joined Alphabet Inc.‘s Google as Managing Director and Global Head of Private Equity. Meanwhile, James Dyett, OpenAI’s head of sales, also departed after three years, joining venture capital firm Thrive Capital as Operator in Residence. OpenAI had already lost several key executives and AI researchers earlier in 2026. Meanwhile its poaching more corporate types and executives from SaaS companies in prep for its IPO. I’m fairly skeptical that their Codex campaign on X is even true.

We have to compare OAI with Google, Anthropic and the top Chinese labs at every step now not just in model benchmarks, but in product execution, confidence in their business model, marketshare and revenue momentum (ARR) vs. cash burn. Just months for a supposed IPO later this year, OpenAI do not appear product or confidence ‘ready’.

Anthropic not OpenAI is the AI Company Everyone is Talking About

While SpaceX, OpenAI and Anthropic are all going public in 2026, Anthropic is the one that is actually performing in the space. David Sacks explained what Silicon Valley and China are noticing too:

• Anthropic Q1 alone $10B ARR to $30B.

• Anthropic in April, 2026 went from $30B to $44B and that's $96 million in new ARR added every single day.

• OpenAI has not seen similar ARR momentum, in fact their revenue growth has been slowing as they have lost markets to Google and Anthropic in the last year in key areas.

Anthropic on Pace for a $2 Trillion in Revenue by 2030

While it’s not clear when OpenAI will even become profitable (if ever) with tremendous cash burn and losing marketshare in both B2B adn B2C in 2026, Anthropic is succeeding at such a scale it might make both OAI and SpaceX AI irrelevant. OpenAI could find itself obsolete while the debt of partners like Oracle is eye opening. OpenAI is recalibrating its massive compute infrastructure plans, moving from a projected $1.4 trillion in long-term commitments down to approximately $600 billion by 2030. It could end up being an even more extreme scale back. OpenAI have been historically fiscally irresponsible and short-sighted.

Meanwhile Anthropic increasingly has the industry’s wow-factor and the confidence of investors on its side just a few months from going public in an IPO likely in November or December, 2026. The ARR story of Anthropic (good timing) and BigTech ramping up Capex, puts OpenAI in a nearly impossible situation.

OSS Capital

OpenAI’s Problematic History

OpenAI was founded on December 8, 2015, by a group including Sam Altman, Greg Brockman, and Ilya Sutskever. Its history has been filled with struggle, drama and issues around the honesty and integrity of Sam Altman. While most cofounders have left OpenAI, in the Elon Musk trial it has come to light the extensive financial ties Greg Brockman has to Sam Altman (not loyalty), but financial incentives to remain. So many eye-opening tidbits have come from the Musk OpenAI trial, a few of which we’ll touch upon and go a bit deeper into.

Greg Brockman has Financial Ties to Sam Altman

Furthermore Greg Brockman we learned has a stake in OpenAI of close to $30 Billion. Separately he’s said to have $10 million from Altman. It’s alleged that in 2017, Sam Altman gave Greg Brockman a percentage ownership of Altman's personal family office. There appears to be conflicts of interest and financial entanglements that the general public and would-be investors were not previously aware of.

According to Reuters and others, the details were ‌shared in court during questioning by a lawyer for Elon Musk (May 4th), who co-founded OpenAI and is now suing the company on grounds that it improperly became a for-profit company, abandoned charitable goals and should turn back into a nonprofit. The various leaks and tidbits from the court case significantly undermine Sam Altman’s leadership credibility and suitability for a company going public.

OpenAI’s Mission has been to Replace People

OpenAI’s officially stated mission is actually to ensure that Artificial General Intelligence (AGI)—which they define as “highly autonomous systems that outperform humans” at most economically valuable work—benefits all of humanity. Since late 2022 however we’ve seen a collapse in Entry level opportunities, tech layoffs, lower consument sentiment and a stark lack of ROI from Generative AI products and their capabilities. We’ve also seen OpenAI unable to keep on the frontier of LLMs with AI coding and agentic capabilities.

Did the Sora app that was putting out AI video slop benefit anyone? OpenAI’s failed video AI app. Did a ChatGPT that is and was morbidly sycophantic benefit humanity? OAI’s products clearly mirror Sam Altman’s lack of good judgement and normal ethical standards. He had to be persuaded not to launch an “Adult-mode” version of ChatGPT. The problem is there’s not much sign Generative AI is going to be healthy for society much less good for civilization.

Healthcare and Social Assistance have added nearly 1.8 million private-sector jobs in the US since the end of 2023 while all of other industries combined have lost 127,800 jobs.

Most new jobs in the U.S. have been in healthcare, among the least Generative AI exposed industries:

OpenAI’s Tech is Getting a failing Grade in Improving the lives of Consumers 😡

Three years into OAI’s era of AI, we have to consider the possibility that it has failed in its mission statement. Consumer sentiment is at a record low, and the technology hasn’t open the door to new jobs or more high quality jobs.

The Consumer Sentiment Index fell -1.7 points in May, to 48.2, an all-time low. Americans unable to play the stock market are seeing their futures dissolve into grave financial security anxiety and the prospect of technological automation. Furthermore, the perceived financial situation among Americans declined to the lowest since 2009.

With SpaceX becoming effectively a Neo Cloud for Anthropic’s compute dilemma, xAI and eventually OpenAI may have to concede defeat as they don’t have the capital to keep on competing in this manner. Google, Meta, ByteDance (raising 2026 Capex outlook) and Alibaba on the other hand do.

The ChatGPT maker of course has many legal disputes that are on-going with regard to mental health spiraling, suicides and even mass shootings. Clearly this is not a company that prioritised trust and saftey in any meaningful way. This means trust in their Charter and in Sam Altman’s leadership is likely at an all-time low in mid 2026. If OpenAI is creating toxic products, how can companies trust it as an Enterprise AI or Coding solution?

If OpenAI was a well run company even with the considerable funding advantages in has gotten - it obviously wouldn’t be in this situation. It’s hard to believe the Chatbot maker has received a cumulative total of approximately $190.6 billion in funding to date. The immature antics of Altman that the Musk trial is revealing is flashing red for investors.

Anthropic Mythos might be a Frontier Model that’s a Game Changer

METR

“An early Claude Mythos Preview snapshot we provided METR has a time horizon of more than 2x the next best model on their 80% success rate benchmark". - Alex Albert, Anthropic

Anthropic Mythos is making OpenAI Look Amateur

While I acknowledge that Anthropic has had the better AI talent relative to OpenAI likely from late 2024 onwards, it’s really starting to show with their new products and bleeding edge models. Similarity it took Google a year of focus to regain an AI-full stack and vertical integration edge over potential disruptor OpenAI. Ironically OAI during that same time period has likely gone significantly backwards in demonstrating real innovation and executing.

METR

The Bear case for OpenAI’s Future is Solidifying

All of which leads me to believe that OpenAI has lost its way and that it may potentially be in a downward spiral impossible to recover from. There’s no other rational conclusion. I have been bearish and a critical of OpenAI’s likely trajectory well before it becomes more popular among bloggers, YouTubers and random tech influencers on LinkedIn or X. This is not news for me but the Musk trial really has brought all of this home and resurfaced just how warped OpenAI’s internal functioning has been.

To make matters worse, there’s obviously a high degree of corruption in OAI’s leadership structure. Emails surfaced during the trial from Musk’s team suggesting this "on the side" compensation could create a "greater allegiance" to Altman, potentially compromising Brockman's independence as a fiduciary during OpenAI's transition to a for-profit structure. Brockman’s personal diary is fairly damning.

“By the end of this week, you and Sam will be the most hated men in America. If you insist, so it will be," the filing states.” - Elon Musk to Greg Brockman (text message)

Some pretty crazy passages by Greg Brockman too in his diary:

Brockman laughing his way to the bank. (I mean courtoom)

The Big Lie Admission

"Cannot say that we are committed to the non-profit. don't want to say that we're committed. if three months later we're doing b-corp then it was a lie." Musk’s legal team argues this shows Brockman and Sam Altman were already planning the for-profit pivot while publicly reassuring Musk (and the IRS) that they remained committed to a non-profit mission.

Following Sam down a path or moral bankruptcy via the Peter Thiel playbook seemed inevitable for Brockman:

Perhaps the most damaging excerpt cited is a note where Brockman acknowledged the ethics of their plan: "It’d be wrong to take the non-profit from [Musk] and turn it into a B-corp without him—that’d be morally bankrupt, and he’s not an idiot."“

Musk is All You Need

History will show that the compute deal with SpaceX is what enabled Anthropic to overtake OpenAI likely for good. Elon Musk went from calling Anthropic evil on X to meeting with them and being impressed by their senior team before the surprise deal was announced.

Anthropic was having compute issues and for good reason. I had predicted that they would overtake OpenAI in ARR in 2026 and it happend just about when I thought. The thing is, I didn’t expect the acceleration we’ll see in the second half into the IPO. From $20 Bn. and doubling has surprised many of us frankly.

“Dec 2022 to Jan 2025 was 10x per year, twice. Dec 2025 to May 2026 was 5x in five months.”

As promising as the first few months of ChatGPT adoption looked on paper, OpenAI clearly underestimated and didn’t project actual competition to take place at the speed that it did, and you see the inexperience of Sam Altman and his constantly changing team in the process of the early to mid 2020s.

Now as of May, 2026 - the writing is on the wall.

By April, 2026 the AI Mega IPO Pricing was Over

Six months before Anthropic’s IPO, we already could feel the tide turning. We were witnessing AI history. It didn’t matter how many Code Reds OpenAI made or what they did, they had lost the trust of companies as an Enterprise AI leader. They had lost the trust of white-collar workers, scientists and most coders.

Anthropic will likely do another round of funding at around a $1 Trillion valuation. Byt the time they IPO they will likely be bigger by market cap than both OpenAI and SpaceX. It’s hard to see any other outcome. They timed their peak at the right time and Mythos hasn’t even been given the go-ahead to be released yet. A models so powerful and capable even the U.S. Government is worried.

OpenAI’s Future is “Directionally Very Bad”

Some of the texts when Sam Altman was about to be fired, are stunning:

Source: via Internal Tech Emails.

OpenAI’s Results

Years later that AGI tension between "benefiting humanity" and "outperforming humans at work", neither of which came to pass has us looking elsewhere - to Gemini, to Claude’s AI tools, to cheaper Chinese models. Rumors of ChatGPT’s legendary retention rates and Codex sales in my mind are likely fake. OpenAI’s own projections about its business have also clearly been misguided.

And if you had invested with Sam Altman, you must be getting a bit sick to your stomach in 2026. It’s fairly clear to most AI onlookers that Microsoft and OpenAI won’t be on the right side of history so far as frontier AI labs or frontier AI products go. That is of course a problem since Microsoft owns a reported 27% equity stake in OpenAI.

Even with an amble head start, first mover advantage, way more capital than Anthropic, it’s failed to lead. The way Meta is spending in Capex you know they might become what xAI could have become. Even Cursor is showing more ARR inflection acceleration than OpenAI now in the crucial Enterprise AI B2B growth. It looks like OpenAI already peaked back in early 2025.

Greg Brockman’s diary is not, by itself, proof that OpenAI committed fraud. But it’s not looking good for Altman’s chances of still being CEO by the time this laggard actually goes public likely in early 2027. There were a lot of red flags just to be clear, costly acquisitions, worrisome pivots, manipulative ChatGPT AI companionship lines, dozens of dubious statements and obvious lies. Optics matters if you are promising as much as Sam Altman has been promising for a decade or longer. The results relative to the pace of the industry, just haven’t been good.

Anthropic Beat OpenAI with less than Half of the Funding

So which AI IPO could you bet on in late 2026 or early 2027?

When Anthropic reaches Compute and Funding Parity how far will it be ahead?

How Much Marketshare can we Expect OpenAI to lose in 2026?

Back in April I noted that, according to Apptopia, ChatGPT fell below 40 percent marketshare in the U.S. mobile app daily active users, for the first time ever. It stands at 38.7%. Six months ago it had 52%. So Gemini, Claude and others might be continuing their climb in May, 2026 we have to assume.

April, 2026.

However it’s the B2B, API and Enterprise AI market share that is the main driver of Anthropic’s growth and OpenAI’s fastly approaching irrelevance. Chatbots are no longer as useful in 2026, given how Agentic AI is evolving. While Codex might be a good product, it’s not going to save OpenAI’s business model compared to better run companies with more capital and business confidence.

OpenAI will face Stiffer Competition as First Mover Advantages Fades ⏳

It’s Meta that actually has the most potential to further dethrone marketshare away from OpenAI in B2C given the amounts of capital and leverage they have with their family of apps. With xAI being folded into SpaceX AI, it’s not a good sign for the future of Grok as a B2C challenger to OpenAI either. Anthropic partnering with SpaceX really does change the dynamics of the coming IPOs. DeepSeek getting big funding in 2026 also could pressure ChatGPT globally. Meanwhile though few in Silicon Valley like to admit it, Alibaba and ByteDance are rapidly improving their Enterprise AI, developer and B2C offerings in Generatie AI, faster than many thought possible.

OpenAI still has a massive number of ChatGPT users and a growing number of Codex customers. However Anthropic being more diversified with Alphabet and Amazon both having equity, they are better positioned to become profitable first. Meanwhile Google and very possibly Meta are poised to advance their AI product rapidly. Google I/O 2026 is of course just around the corner on May 18-19th.

Power Rankings

Here is how I’d rank the ecosystem in napkin math roughly speaking in May, 2026:

• Anthropic

• Google

• OpenAI

• Alibaba Qwen

• Anysphere (Cursor)

• SpaceX AI

• ByteDance

• Zhipu AI

• DeepSeek

• Reflection AI

• Meta AI

• Moonshot AI

• Microsoft AI

• Mistral

• Tencent

• Baidu

• Nvidia

• Amazon

OpenAI has an off chance of still being a success, but nothing wildly approaching what it seemed like a few years ago or back in 2023 or 2024. This is a quickly changing industry after all and they made a lot of poor strategic decisions with some exceedingly shady leadership. It would not be therefore surprising to see them slip further down the rankings even with their historic funding and attempts at compute dominance.

BigTech Capex Increases Has Nullified OpenAI’s Competitive Advantage

Surging capex from the likes of Google, Amazon and Meta means OpenAI’s compute advantage has been totally undermined. Anthropic teaming up with SpaceX is the nail in the coffin for OpenAI’s future prospects.

The Capex for AI Infrastructure of the main Cloud hyperscalers means OpenAI’s compute advantage investments are practically nullified as Anthropic has ample room to partner with AWS and Google Cloud. It doesn’t come cheap though:

“The consensus of analysts is now for the mega-cap US hyperscalers to spend $755 billion on capex in 2026, representing growth of +83% vs. 2025. This capex is estimated to reach 100% of cash flows from operations this year” - Goldman Sachs, source.

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OpenAI Employees are Cashing Out pre IPO (never a good sign)

The WSJ revealed on May 10th that OpenAI allowed employees to sell up to $30 million worth of shares (pre IPO) each in a recent financing. The share sale marked the first time many who joined the company were able to cash out.

In what has to be a desperate move to retain AI and executive talent. Incredibly roughly 75 employees walked away with the full $30 million, according to people familiar with the matter.

• No other tech boom in history has lavished that magnitude of wealth on such a wide swath of employees even before a public listing.

• OpenAI is currently the world’s most-valuable tech startup, and employees who were at the company when it first issued shares seven years ago have seen the value of their stock grow more than 100-fold. By comparison, the Nasdaq composite roughly tripled in the same period.

This shows a real lack of confidence among employees and a real desperation among leadership to try to stop the exodus of talent. Of course it’s far too late for that. With OpenAI’s place on the frontier in question before the IPO, many questions remain about the sustainability of the business.

OpenAI Missing Targets

In 2026 it was revealed that OpenAI has been missing its own internal targets as its own CFO has raised concerns that have been widely reported. A once dominant AI startup, suddenly no longer feels very dominant.

The Wall Street Journal reported that OpenAI has recently missed its own projections for user growth and revenue. The shortfall has sparked internal concern about whether the company can keep pace with the massive financial commitments.

OpenAI CFO Friar told colleagues earlier this year that OpenAI may not be ready for a 2026 listing because it still needs more organizational and procedural work, and she also questioned how much the company needs to spend on AI servers, according to the report. The report said the concerns came after OpenAI closed a funding round with US$122 billion in committed capital at a valuation of US$852 billion.

OpenAI reportedly missed an internal goal to reach 1 billion weekly active users on ChatGPT by the end of 2025. I don’t know what kind of a goal that is when they are losing marketshare in both B2C and B2B. Given declining sentiment among young people towards AI, we have to assume that ChatGPT’s deceptive and sycophantic nature is in part to blame for this.

OpenAI’s IPO relative to Anthropic and SpaceX

Given OpenAI’s recent struggles, it’s hard to see how they can IPO before Anthropic or how they will have an attractive market valuation compared to its two major rivals who have joined forces? Anthropic’s funding round will help keep the lights on at SpaceX AI hilariously enough.

OpenAI looks like a company in a downward spiral in 2026, if the data we can find is any indication. OpenAI will lose at least $15 Billion in 2026, or triple what it did in 2025. Their growth at all costs model is failing against their peers and a rapidly evolving Chinese AI sector.

Their compute spending even pulled back is no longer rational given their place in the ecosystem.

• OpenAI President Greg Brockman’s May 2026 court testimony, where he stated the company is prepared to spend $50 billion on computing power this year alone.

• You have to add Capex of their partners like Oracle and Softbank, basically a lot of debt to that number.

• Given that they are falling behind Google and Anthropic in momentum and models, it does not appear that their business strategy was sound.

Their IPO even with the Peter Thiel Billionaire mafia’s backing, might be fairly disappointing. Oracle has so much debt riding on the project. OpenAI has a chance of imploding due to the financial stress of Sam Altman’s gambling with the future prospects of the company. It’s extremely high-risk given how flat the products have been relative to competitors.

OpenAI’s Biggest VC Backers

The quality, caliber and people associated with their backers is also rather lacklustre. These are gamblers, laggers and ponzi Schemers in many directions.

• Microsoft (27% stake)

• Softbank (11% stake)

• Thrive Capital

• Khosla Ventures

• Reid Hoffman Ventures

• Peter Thiel: Peter Thiel and Elon Musk were part of the initial $1 billion pledge in 2015, though Musk has since distanced himself to focus on xAI, now part of SpaceX AI.

• MGX. Don’t even get me started on OpenAI’s Middle East connections.

GenZ and Alpha are Quitting ChatGPT

The sentiment around AI of GenZ is a proxy for ChatGPT satisfaction. Because ChatGPT is still the dominant chatbot in terms of shear numbers (like in India for example).

These young GenZ (and older Alpha cohort) group are showing signs of changing internet behavior. They appear to be turning away from cringe Meta app scrolling and OpenAI’s “AI companionship” infatuation of (2023 or 2024).

This is big cohort struggling with youth unemployment globally. They are starting to blame AI for post graduation fears. With less immigration this AI generation has a unique consumer power in the direction the industry takes. Consider this:

America is at peak 18, and the number of 18-year-olds will fall 14% over the coming decade, see chart below.

America Hitting Peak 18-year olds

From 2026 onwards we might see rapidly aging populations, talent shortages, entry level job low-hiring environments exasperate this generation economically and anxiety wise. Meta apps and TikTok already decimated the mental health of the older members of GenZ.

They aren’t impressed with ChatGPT sycophantic tendencies nor the workslop that they are being forced to use at the office. This was the first generation who used ChatGPT in college. They are startling to realize they might be less better off for it.

A ChatGPT Slop Internet Doesn’t Interest Them

There’s some early indications AI slop is accelerating the ‘infinite scroll’ behavior of mobile users especially among the youngest users. Consumption patterns appear to be impacted by the less human and mass produced low quality content.

As GenZ have lower trust in AI, their mobile behavior means more video consumption and less social media feed scrolling. While this generation appreciates AI companionship features, the rise in “slop” is pushing them back to the real world.

OpenAI’s is Hurt by Anthropic’s Success

Given that Anthropic is literally a splinter company from OpenAI that has overtaken it, and that so much of the original talent of OpenAI has left, this doesn’t leave much for OpenAI investors when they go public, to be excited about.

Anthropic's market-implied pre-IPO valuation surges to a record $1.4 trillion, rising another +40% in 24 days.This puts Anthropic's implied valuation up +1,067% since October 2025, per onchain pre-IPO trading data. - Source.

• Anthropic has cultivated a much more trustworthy and credible reputation among real businesses and Enterprise AI customers. The 2026 surge in new demand is giving no doubt which is the more attractive IPO.

• The Department of War being harsh on Anthropic while OpenAI taking their contract has only enraged the public even more in the direction of Anthropic. It’s known that the Trump Administration has financial and personal ties with the VCs of OpenAI. The optics of Government favoritism is really bad for OpenAI. Even as much of the Stargate scale of AI Infrastructure plans turns out to be overstated.

OpenAI’s Changing Partnership with Microsoft

There has been considerable turmoil for OpenAI’s relationship with major funder Microsoft. It has both helped and hurt them in terms of scaling their business. OpenAI and Microsoft have agreed to a hard cap on total revenue-sharing payments, reportedly set at $38 billion.

Too little too late, OpenAI can now also sell products on Amazon and Google Cloud, expanding enterprise reach. This helps competitors of Microsoft Azure, while giving OpenAI an Enterprise AI boost. I am skeptical of Satya Nadella’s chops in an AI business environment as evidenced by Microsoft’s AI product execution vs. their capex. Sam Altman didn’t do his due diligence when taking money from Microsoft. This sort of result was sort of inevitable. The legal and partnership issues have been enormous with OpenAI always trying to re-negotiate the deal.

OpenAI’s conducted a partnership with Amazon that landed just a day after the company restructured its relationship with Microsoft for the second time in six months. These aren’t good optics and OpenAI and Microsoft clearly have a frayed relationship. In the trial, Musk accuses Microsoft of aiding and abetting OpenAI’s alleged breach of charitable trust.

Microsoft’s more than $13 billion worth of investments in OpenAI in many ways started the AI boom and the mad rush to AI Infra Capex. Microsoft even with early access to OpenAI’s best models haven’t executed Copilot or their own AI efforts very well, which is of course very telling. In his testimony, Nadella said he was “very proud” that Microsoft took the risk to invest in OpenAI when “no one else was willing” to bet on the fledgling lab. Hilariously the trial uncovered that many Executives at Microsoft were wary of making the deal.

Must testified that the scale of the investment bothered him, and it prompted him to open a legal investigation into OpenAI. “I was concerned they were really trying to steal the charity,” Musk said from the stand at the trial a few days ago. Microsoft were certainly a major factor in streeting OpenAI from its previous business structure into this rush for an IPO. Sam Altman has had to balance Microsoft’s business interests with an impossible task of scaling and trying to gain a path to profitability. Microsoft have been such a major siphoner of revenue from OpenAI, it’s been bleeding cash more so than it otherwise should have been.

The desperation around the IPO is so glaring that now this new payment cap would in theory help OpenAI present a stronger long-term ​pitch to investors as it works toward a public offering, which some executives said could take place as ​soon as the end of this ​year. I personally think it will have to be delayed to early 2027 to give them more time to get their books in order.

OpenAI someone got one of the most critical changes is the dissolution of Microsoft’s "First Right of Refusal" for OpenAI’s compute needs. But Anthropic having both major partnerships with Google and Amazon, AWS and Google Cloud means the OpenAI and Microsoft is the inferior duo partnership. Satya Nadella represents an old way of doing things, and while he was a great pioneer for Azure, the same cannot be said for his AI strategy. In the initial days, Microsoft gave OpenAI sharp discounts on computing resources to gain a first mover advantage. All of this has not turned out perhaps as they had hoped. Microsoft still profit greatly from OpenAI going public and have made considerable ROI from the transactions, but also hampered OpenAI in the process.

Under their partnership (renegotiated in late 2025), OpenAI pays Microsoft 20% of its total revenue. This has meant Microsoft has been reaping revenue from OpenAI all of this time. Microsoft essentially takes around $450 million a month from OpenAI from this deal alone. While OpenAI is burning cash from its ill-conceived bet on compute supremacy. It’s also clear that Sam Altman undermined the partnership with Microsoft to move closer to AWS.

Finally in the trial, Michael Wetter, a corporate development executive at Microsoft, said the company has recognized approximately $9.5 billion in revenue to date through its partnership with OpenAI as of March 2025. Additionally that $13 Billion investment in OpenAI is now worth - let’s see, Microsoft’s stake is now estimated at approximately $135 billion. Microsoft and OpenAI basically screwed each other over at every turn they possibly could while OpenAI openly breached their contract at several points just to re-negotiate a more favorable deal. Microsoft has essentially 12x their investment in OpenAI, while fumbling many aspects of the job. Including how OpenAI is in many ways a new competitor to some of their core business services. It could go down as one of the best and one of the worst investments in tech business history, and certainly one of the most impactful.

Could Men be a Casualty of the AI boom in the United States?

Since the AI boom began, American men haven’t been having it easy. Are layoffs in technology catching up to the male workforce? All those male SWEs struggling to find an entry level position might be wondering what the AI boom is exactly.

Was ChatGPT good for all of those Software Engineers (SWEs)?

OpenAI prides itself on developing AGI that benefits humanity? But look at it from the perspective of even engineers. AI coding models have hurt their prospects and especially those young graduates. But could things be turning around?

In the U.S. the narrative that AI will make SWEs obsolete really took hold plummeting enrollment in SWE degrees. As the U.S. made immigration more difficult, there could even be a shortage of SWEs in the future.

The software engineering job market in the U.S. is showing clear signs of a rebound in 2026, though it looks different than the hyper-growth phase of 2021. : So far this year, the number of open roles has jumped about 30%. Although it remains to be seen if those open positions will actually be filled and by whom.

Jevons paradox vs. a very tight labor market and a BigTech efficiency drive. OpenAI doesn’t make the best AI coding models. OpenAI also seem to be laggards vs. Anthropic and Anysphere (Cursor) in the Agentic AI framework scaling. What incentives do developers have now in 2026 to be loyal to OpenAI’s ecosystem? They don’t have either the ecosystem strength or the best approaches. Codex is decent, but it’s not Claude Code great or Cursor level innovative. OpenAI still makes world-class model, but they are no longer at the frontier.

ChatGPT Destroyed Management Jobs

In the U.S., middle management is experiencing a rapid decline, with Gartner projecting that 20% of organizations will use AI to eliminate over half of their middle management roles by 2026. In Tech layoffs, Management jobs are very vulnerable and this trend is accelerating this year in 2026 with a new batch of high-profile layoffs by companies like Oracle, Amazon, Meta, Nokia, Microsoft, Block, Cloudflare, PayPal, Coinbase and so forth.

The AI is causing a huge efficiency drive where middle management jobs shrink and in some cases AI agent swarms take their place. But the ranks of middle managers, the professionals that bridge senior leaders with frontline employees, have been thinning in recent years. BigTech has been trying to flatten their organizations as they anticipate new use cases for AI to drive increased efficiency.

I don’t have to tell you that less management jobs lowers a lot of opportunities and career ladders for especially men in America. Middle managers made up one-third of all layoffs in 2023, a Bloomberg and Live Data Technologies analysis found. The AI boom is good for humanity right? Not so great for the next generation of leaders in corporate America. This is very much an on-going story in the AI boom. Will AI end up supervising us instead? 🤔

The AI Boom is Hurting Employee Engagement

In corporate America where workslop is forced on employees in the AI Boom, it’s destroying morale as well. According to the Gallup survey, there has been a steady decline in employee engagement since 2020. Only 20 percent of workers say that they are engaged in their jobs, with 16 percent saying they are “actively disengaged.”

AI anxiety has become a defining factor of the workforce in the mid 2020s. Not just for layoffs but the stress of job role redesigns and career ladders disruption and uncertainy around the future. The prevalence and quality of workslop is a whole other matter with CEOs and executives forcing employees to adopt AI or else, is compounding the situation. AI fatigue and a connection crisis are real in corporate America and the productivity gains may largely be offset by the reduced engagement of employees.

OpenAI’s Business Model Issues

The potential IPO of OpenAI recently valued at roughly $852 billion following its March 2026 funding round is arguably one of the most anticipated market event of the year. But when you drill down into the businesses, it’s fairly messy.

High marginal costs and capex intensity make OpenAI’s business model and path to profitability amid rising competition rather bleak. OpenAI isn’t like Amazon pioneering E-commerce and racing to scale, because OpenAI is already behind its own competitors.

Some estimates suggest OpenAI could face annual losses in the tens of billions as it chases the next generation of models while losing marketshare in B2C and B2B. It still has an impressive business and many great opportunities, but the cry of skeptics is getting louder each month of 2026 in blogs and on social media.

Mass scale and hype is not enough if you are a poorly run company. I don’t know how else you describe OpenAI and its lack of an ability to execute and seize on a generational opportunity? Sam Altman’s immaturity as a CEO has really shown with far too much internal drama and chaos for OpenAI to become a reliable BigAI leader. In 2026, Anthropic, Google and China are encroaching on OpenAI’s territory. I don’t personally see a path forward nor do I believe Advertising works with ChatGPT compared to AI mode, Gemini and a vertically integrated stack like Alphabet has.

A massive portion of ChatGPT’s user base remains on the free tier and are switching. Converting these "power users" into high-margin enterprise or individual subscribers remains an unrealistic scenario. Sam Altman’s personal investments and conflicts of interests are very high, skewing everything this company has done to personal gain.

The Sam Altman Dilemma

Recently, the chair of the House Oversight Committee has sent a letter to OpenAI Chief Executive Sam Altman requesting information about potential conflicts of interest between Altman’s personal investments and his operation of the company.

Did he think his own SBF like antics would not be discovered or get caught, I don’t get it? How can you keep a CEO of this level of integrity on when you are about to go public? It just does not make sense. It hurts the company’s credibility in an B2B, API or Enterprise AI sense.

As far I can tell, xAI and OpenAI have tough years ahead even as SpaceX and OpenAI seek to go public. SpaceX AI even with a proposed TeraFab project isn’t making money. Elon Musk’s moonshots behind the SpaceX IPO are pipedreams way larger and less realistic than OpenAI claiming it can deliver AGI, one of the worst marketing stunts in Tech history. All of these failed promises erode trust and Sam Altman is like a Venture Capital overlord that isn’t high on trust.

A Lower Quality AI IPO Than it Appears on Paper

Obviously, the ongoing litigation involving early founders (including Elon Musk) regarding the company's deviation from its original mission remains a "black swan" risk for public shareholders among the many risks to this business. It’s not even close to a company that is ready go to IPO, but Sam Altman will push it going public because he believes in the hype. But when your conduct doesn’t deserve the hype, you become a liability to the firm. But when your own Board isn’t giving you good advice or what you need to hear, all investors and shareholders suffer. The churn rate of the best AI researchers at OpenAI tells you all you need to know.

The company’s pivot to a AI product company has not been successful. Microsoft’s influence has been detrimental to OpenAI. OpenAI is becoming a symbol of the chatbot mania of 2023, that is fading badly. OpenAI neglected to build a great and diversified business model that could sustain a viable future. I don’t believe it will be among the winners of Enterprise AI. Its fate as a public company could be as dramatic as its Sam Altman led chaos has been internally. Ruthless VCs don’t care about chaos, as long as they come out ahead. Sam Altman may as well be sharing his role with his personal investments mania. This duality of Sam Altman means he’s gone from being an asset to a liability with the scrutiny that a major IPO entails. It increases the financial risk for potential shareholders greatly.

OpenAI as a Nucleus of Power

Historically speaking, OpenAI enabled a nclueur of talent to leave the company and build their own companies, this OpenAI mafia might be the real legacy of the project. Out of the original 11 co-founders who started OpenAI in 2015, only three remain at the company as of May 2026.

I was saddened to learn of Greg Brockman’s choices. Greg Brockman, on Monday disclosed deeper financial ties to CEO Sam Altman than previously known as well as a stake in the ChatGPT maker worth almost $30 billion. Is there anyone loyal to Sam Altman that does not have financial incentives to do so? What a pathetic and deplorable situation.

Anthropic is just a success-story of the OpenAI Mafia, let’s face it.

OpenAI Mafic Companies

This is just a small selection, there are way more.

• Anthropic ($380B+ valuation): Founded by Dario and Daniela Amodei (former VP of Research and VP of Safety). It is currently the largest OpenAI spin-off, known for the Claude model series and a focus on “Constitutional AI.”

• Safe Superintelligence Inc. / SSI ($30B valuation): Founded in 2024 by Ilya Sutskever (OpenAI co-founder and Chief Scientist). The company focuses exclusively on developing safe superintelligence in a “straight shot” research lab environment.

• Perplexity AI (~$21B valuation): Founded by Aravind Srinivas (former OpenAI researcher). It has become the leading AI-native “answer engine,” challenging traditional search by providing cited, conversational responses.

• Thinking Machines Lab ($12B valuation): The newest major entry, founded by Mira Murati (former OpenAI CTO) in late 2024. The lab focuses on building advanced multimodal AI models.

• xAI (now SpaceX AI): While founded by Elon Musk, many core technical leaders like Kyle Kosic and Igor Babuschkin are OpenAI alumni. It focuses on “truth-seeking” AI and integrates deeply with the X (formerly Twitter) ecosystem.

• Adept AI ($1B+ valuation / Licensing Deal): Founded by David Luan (former VP of Engineering). While a significant portion of the team joined Amazon in 2024, the company pioneered “Action Models” that use software like a human would.

• Cresta AI (~$1.6B valuation): Co-founded by Tim Shi (former OpenAI technical staff). It specializes in real-time generative AI for contact centers to coach human agents during live sales and support calls.

• Covariant (~$500M+ valuation): Founded by Pieter Abbeel, Peter Chen, and Rocky Duan (former OpenAI researchers). They focus on “Physical AI,” creating the “brains” for industrial robots to handle complex warehouse tasks.

• Eureka Labs (Early Stage): Founded in 2024 by Andrej Karpathy (founding member of OpenAI). An “AI-native” education company focused on creating a personal AI tutor for every student.

The Real Legacy of OpenAI

OpenAI itself can be doomed to fail but from a funding perspective it brought together the core of the AI boom and the crazy VC spending to back it up. This craze of VC investments in AI had a serious case of FOMO. But if Anthropic can make it, why not others?

• As of May 2026, the "OpenAI Mafia"—startups founded by alumni of the research lab—has collectively raised over $310 billion in disclosed funding.

• OpenAI has raised a staggering total of approximately $190.6 billion in disclosed funding.

• This is not counting all the “circular funding” popular now in BigTech.

• OpenAI’s work doesn’t represent a technological revolution, it’s a Venture Capital instrument.

Oddly this fact is lost on a lot of people. OpenAI’s early success enabled VCs to game the markets and pick the winners.

The AI Boom, Immigration, Talent, Demographics and Fertility

At a time when the U.S. labor market is tightening, it’s future fertility prospects are not so great. Amid talent shortages, what is America going to do? The old are leading the blind. Since the second Trump administration took office in January 2025, the United States has implemented over 500 immigration actions, resulting in a dramatic reduction in both legal and illegal immigration.

It doesn’t take much analysis to realize where U.S. debt and demographic debt gets you in the years ahead.

The U.S. fertility rate just hit 1.62 in 2025, the lowest on record.

The U.S. is betting that AI will boost productivity even amidst an affordability crisis. A fertility rate of 1.62 means each generation runs 23% smaller than the one before it. Less births for a consumer economy with an aging population isn’t good for prosperity.

Teen fertility alone collapsed from 41.5 births per 1,000 in 2007 to 11.7 in 2025, a 72% drop. The largest behavior change in U.S. demographic history happened during the longest expansion in U.S. demographic history. Who needs mates when there’s AI companionship and inflation is taking a bite out of your future.

ChatGPT is not going to improve this situation. Debt, capex and demographic implosion is likely going to mean AI is part of the downfall of the United States, not its empowerment. In that I see China’s AI ascendancy as more certain. OpenAI causing an LLM driven boom allowed China to make more long-term diversified bets.

As for Trump economics immigration, it’s even more dire: The tech sector, which has historically relied on the H-1B and O-1 visa pipelines to fuel R&D and engineering, is currently facing what many are calling a "Great Deceleration." This is incredibly poor policy for a viable future. The old leading the rich. Let’s see how this AI boom turns out.

OpenAI in Desperation turning to Consulting Business

OpenAI has a very PR hacking type framework where now it’s going after the consulting business. If you are losing, try hacking yourself into a winner.

OpenAI will acquire a consulting company to contribute to a new private equity-backed joint venture to help drive adoption of its artificial intelligence software across more businesses. OpenAI Deployment company sounds incredibly shady. If you have a bad product, just compensate with more sales.

Can we deploy Sam Altman somewhere else please? The project is being called The OpenAI Deployment Co., or DeployCo for short. Control your own destiny, just make more side-quests.

DeployCo launches with $4 billion of investment at a $10 billion pre-money valuation, with OpenAI retaining majority control. Bain & Co., Capgemini and McKinsey & Co. — are among DeployCo's investors. It now appears that OpenAI according to Axios, has somehow convinced these legacy firms to help fund their own disintermediation. Be a part of the future, join the circular financing and sales ponzi-scheme. You will be treated well and fairly. You can’t really make this stuff up.

TPG is DeployCo's lead investor, with Advent International, Bain Capital, and Brookfield listed as "co-lead founding partners."Other backers include B Capital, BBVA, Emergence Capital, Goanna, SoftBank, Warburg Pincus, and WCAS. I’ve never seen a company like OpenAI create more products, features and affiliates that don’t actually do very much. OpenAI has become a spider-web of AI shenanigans.

“OpenAI has become a spider-web of AI shenanigans.”

But desperation and losing make you do some pretty weird things. OpenAI is literally losing its AI Supremacy in 2026. It’s going to go public at exactly the worst time in its history.

Feel the AGI

OpenAI let more than 600 current and former employees sell their OpenAI shares back in October 2025 at a ~$400B valuation. Feel the AGI, get rich and move on to greener pastures folks.

Just don’t say anything bad about us, ever, or less okay!

OpenAI employees sold their shares to the likes of Thrive Capital, SoftBank, Dragoneer, MGX, and T. Rowe Price. Incredible what an AGI promises can give you, many millions it appears.

OpenAI vs. Water Resources

The OpenAI led AI boom has led to so many datacenters in the U.S. being built, it could become a water crisis.

Data center water use is projected to surge 170% by 2030. The Colorado River Basin has lost groundwater equal to the entire volume of Lake Mead since 2003.

Water trades like a commodity. California spot prices: $185-$375/acre-foot in 2025. Historical range: $75-$1,680/acre-foot. The U.S. is gambling their electricity, water and jobs away. For you know, better Earnings?

Data centers and homebuilders are competing for the same constrained resource. More stagflation and more expensive housing. Enjoy the AI boom, and a stock market that only goes higher. Meanwhile, Hedge funds are building water-focused vehicles. While the AI boom concentrates financial power and centralizes BigTech further, for the Americans that don’t have access to stocks, they are a big loser.

OpenAI Propped up AI Boom has hastened Wealth Inequality

As far as I can tell, approximately 37% to 38% of Americans do not own stocks. OpenAI has created a world where around one third of Americans are basically are left out of the future.

Is that good for humanity? Is ChatGPT even a good product? We’ll be asking more questions as OpenAI approaches its IPO.

Something is not adding up. OpenAI might have been a scheme to create the perception of an AI boom, that isn’t diffusing to the rest of society in an equitable manner.

What the United States becomes post the AI boom might be an unrecognisable civilization. Roughly 71% of Americans earning less than $50,000 a year do not own stocks and are thus getting absolutely nothing from the AI Boom and are likely hurting because of it. This in a country where many households making closer to $300,000 live paycheck to paycheck.

The Department of War’s AI

OpenAI might be a special purpose vehicle for a geopolitical agenda that’s only now with the Iran war and threats to Canada and Greenland coming into view. OpenAI has become closer to the Department of War in recent months. Military contracts might help OpenAI’s bleeding of cash, just like Peter Thiel arranged for Palantir. This suggests OpenAI’s true legacy could one day be creating Military AI systems, not democratizing AI. Not exactly a company that puts Trust adn Saftey first I’m guessing.

Thanks for reading.