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Dear Friends,

OpenAI just pulled off the biggest funding round in history—$40 billion. That nearly doubles its valuation to $300 billion. And it’s not just them. AI startups raked in $110 billion last year, with investors throwing cash at anything with "GPT" in the name.

But here’s the wild part: these companies are burning through money like there’s no tomorrow. OpenAI reportedly torched $5 billion in 2024. Its competitor Anthropic? $5.6 billion. And most users aren’t even paying for the service. In fact, some estimates suggest OpenAI loses money even on paying customers because serving AI queries is so expensive.

If this sounds familiar, it’s because we’ve seen it before. The dot-com bubble. The Segway hype. Investors chased growth, companies spent like crazy, and then… everything crashed. AI will absolutely change the world, but if these companies can’t turn all this hype into a real business, things could get messy.

I broke all of this down in my latest article on Bloomberg, OpenAI Shows Too Much Money Can Be a Real Thing.

Once you give that a read, here’s my question to you: is AI the next internet—or just another overfunded experiment waiting to implode?

-Gautam

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