2d ago

SoftBank needs OpenAI to stay alive — no matter what

in this episode I explain the numbers that require SoftBank to keep OpenAI alive past all reason: they're spending real money to achieve imaginary private equity valuations and this was enough to make their stock go up. So they can't stop.

https://www.youtube.com/watch?v=zTYxEVRiCvM&list=UU9rJrMVgcXTfa8xuMnbhAEA - video
https://pivottoai.libsyn.com/20250827-softbank-needs-openai-to-stay-alive-no-matter-what - podcast

14 comments

This AI bubble is fundamentally fuelled by too much money that can’t get sane investments — so it’s looking for insane ones.
There’s a real tech revolution going on right now! It’s renewable energy. Wind and solar and batteries are all super-cheap and getting cheaper, the tech is advancing by leaps and bounds, it’s doing amazing stuff.
But that’s a regular business that doesn’t look like a venture capital lottery ticket — so it doesn’t get hype-filled headlines in every newspaper from venture capital PR offices.
https://pivot-to-ai.com/2025/04/10/a16z-raising-fresh-20b-for-ai-bubble-investments/
The finance sector directing the world's resources to the wrong projects is scary dangerous. More than AI itself.
- I think this is spot on. I had that same thing happen at my former employer, which bought a lot of entirely pointless startups in 2010s instead of investing in core business equipment and processes.
I wonder what this means for US GDP, not just the AI bubble, but the various other speculative bubbles goimg around.
How much of the US economy is real and how much is it a fake foam of stock market bubbles?
- Various indicators have been in the 'crash incoming' for years now. And keeping in that state for longer than normal. Which is making me feel (spurred by Talebs thinking that you either have regular small crashes or irregular catastrophic big ones. which he wrote thinking we were already in the latter era) like we are in big trouble. But it doesn't seem to be crashing. And even the authoritarian bs isnt pushing us into the crash territory.
  Doesnt help that sex workers seem the be doing badly for a while now. Which is imho always a nice informal indicator.
- I wonder what this means for US GDP
  Don't worry, unchecked inflation and increasing housing costs will keep the GDP propped up at least for a while longer.
  
  I mean yeah, spreadsheets rejoice, but eventually it's going to be a problem where there is no real economy behind the numbers. How long can we keep pretending?
To repeat: $43 billion in imaginary dollars beats $22.5 billion in real, actual dollars in your hands.
If this doesn't sum up the entire bubble in a single sentence, I don't know what does.
- Modern move money between pockets for profit economics seem to give The Hitchhiker's Guide bistromathics a run for their money.
surely this long line of suckers has to end somewhere
- OpenAI lasts as long as Masayoshi Son can scam Saudi Arabia. Suddenly my 2027 thesis looks more solid. Fuck.
  
  i think that mbs got wiser than that at this point and doesn't put oil money in softbank anymore. saudi money is in vision fund 1 (2017; 45% of it; another 15% is emirati money); i don't think that vision fund 2 has any after they got burned on wework, wirecard, ftx, and so on and so on. per last ed zitron post, most of softbank funding round for openai is not from them but instead from some other investors, whoever they might be, so there clearly is someone further down the line. (initial 10b, of which 7.5b from softbank and 2.5 from others; then if it converts to for-profit another 30b, but if it doesn't, it's 10b (?), of which 8.3b is from other investors, and 1.7b from softbank (either the numbers are wrong or ed accidentally a 1b dollars), but i don't believe that openai will convert, so it's 9.2b from softbank and 10.8 from others, +20b from softbank otherwise)
  
  I mean, I'm down for scamming Saudis. Woo! Let's go ai!

14 comments