I don't understand why he thinks OpenAI can't be one of the duopolies or become the monopoly. OpenAI's models are always the first or second best overall - usually the first. They are also leading in the consumer market by a wide margin. They also made a strategic decision that is paying off which was committing to more compute early on while Anthropic is hammered by the lack of compute.
PS. They've raised ~$200b total, not $1 trillion.
I could see people saying this in 2022, but now? No chance.
Chinese models keep demonstrating that SOTA can be approximated for a fraction of the cost. The innovation out of these companies keep showing diminishing returns, with a greater emphasis on the tooling and application layer. Having the right workflow with the right data is more important than having the right model. We could freeze AI now, and I'd bet good money that the current state of things is good enough to - not be first - but competitive for the next few years.
Even if we do end up with a oligopoly situaiton, it'll be less like Microsoft in the 90s and more like Microsoft now where they just give out windows for free, have support for WSL and the focus is on cloud services rather than their OS.
Wow, sounds like a threat to nation security. Those Silicon Valley companies shills start donating to select donation campaigns with hope to ban Chinese LLM models.
Can you imagine? Your children being exposed to the propaganda that these LLMs will be inevitably tainted to spew?
I'm constantly amazed how this AGI/monopoly narrative can be kept up so long in the West, it just doesn't make sense (unless the state creates said monopoly by forbidding competition).
Claude is kicking ass in the niche of coding and processes.
1 trillion is a lot of money for something that's not differentiated and protected in a massive market.
Does it look like OpenAI has that in place?
Cuban thinks they don't, and won't.
Claude is kicking ass in coding but it seems like Codex is catching up fast. Claude Code's PR has taken a hit recently due to the lack of compute forcing Anthropic to dumb down the models. Codex has been gaining momentum.
Chip manufacturing aren't really differentiated either - it didn't stop TSMC from becoming the monopoly for high end chip nodes, capturing 90%+ of the advanced chip market. The reason they have is because Rock's Law makes it too expensive to build the next node unless you've generated enough revenue from the current node. I don't see why it isn't the same for SOTA models.
Amazon and Microsoft have a seat at the table by virtue of their cloud businesses.
We know LLM companies have, for lack of a better word, "sidestepped" the copyright on millions of works with their "transformative fair use" arguments. Are LLMs also a way to sidestep patents?
Sugar coating the discussion is for children and dishonest ethical rationalization, in my view.
Take Google or Meta: Today Google makes a shit-tonne of money and to make that money they need to run some servers. The servers are extremely cheap relatively to the revenue they make running the business. This makes them a very attractive stock - the core of why SAAS looks great. Now let's assume the monopoly path. Google can win. I think they likely will win. But now they're going to spending... how many hundreds of billions constantly training new models? The cost of providing the service suddenly isn't small relative revenue they're getting. So even for them it looks awful for their valuation.
I think the conclusion the market is rapidly and correctly reaching is we aren’t in an AI bubble, we’re in an OpenAI bubble.
Google, Amazon and Anthropic look likely to see ROI on their capital investments because they’ve made them halfway reluctantly. Microsoft is up in the air. Not sure what Meta is doing. And with the benefit of hindsight, OpenAI used capex as a marketing strategy with investors (while Sam Altman materially lied about his compensation and somehow looped Paul Graham and Jessica Livingston, founder of The Information, into his racket).
The ones killing on ads are Google, Meta, and Amazon.
I just don't see how ChatGPT will gobble those market shares - ads are increasingly tied to sales attribution, and it would require a complete shift of the market for ChatGPT to take over the role of those 3 players.
People will still try to look for content around the products they buy, or will shop for prices, or will look for feedback from other users of the product.
Machine learning has no real moat. There's no network effect, it's not hard (you can just throw money at the problem). It's not data, because we have an existence proof that general intelligence can be trained by a few humans and a shelf full of books. The compute to do it is generally available. As soon as one organization releases open weights, everyone can use it immediately, even on modest local hardware.
Chip manufacturing is insanely hard, it requires know-how, that's the moat. It's not money, otherwise the EU and China would have leading edge fabs.
There were tens of chip manufacturers in the 80s and 90s. Most of them have been absorbed or went backrupt. Just like SOTA LLM training now. Today, TSMC is a monopoly for SOTA nodes. The only reason Intel can survive is due to geopoltics.
Plenty of folks first learn they’re infringing when they get a demand letter. Unless you ask it, I’m not sure it’s on the LLM to search for prior art and patent conflicts.
One, it’s not. They’re roughly even. The folks quoting crypto tokens don’t know what they’re talking about.
Two, Anthropic has more revenue and higher-quality growth.
Three, OpenAI is levered in a way Anthropic and the tech giants are not.
Nobody is immune from being overvalued. But what separates a bubble from normal overvaluation is leverage—the consequence of the valuation deflating isn’t just losses, it’s total loss because of debt or debt-like obligations.
OpenAI has racked those up in its datacenter drive. Anthropic and the tech giants have been more disciplined. If OpenAI’s revenues dip, its valuation not only crashes, its commitments to various datacenter projects start strangling it.
OpenAI, just a few weeks ago, claimed they actually have more revenue than Anthropic based the same accounting rules. Since then, Codex seems to be roaring because OpenAI has more compute capacity. OpenAI also has the majority market on consumers, which they're just beginning to monetize.
How is OpenAI levered? They bought more compute earlier and are now reaping the benefits while Anthropic's growth is slowed by the lack of compute.
You call Anthropic disciplined - I call it a mistake to not have bet on more compute.
These are orthogonal points.
OpenAI is levered because it has signed commitments to compute. Those are obligations it has to pay regardless of whether it hits revenue targets. A revenue slowdown hurts Anthropic. It could kill OpenAI.
Leverage makes good deals into great deals. If OpenAI hits its revenue targets, levering will have been smart. There is a genuine debate around whether OpenAI’s leverage was a good bet. I think it isn’t. You think it is. That doesn’t change that OpenAI is levered, and that this makes it existentially sensitive to demand variation on the downside (and better exposed on the upside).
To conclude, Anthropic and OpenAI could both be over or undervalued. But only OpenAI can truly be in a bubble.
I agree that OpenAI is more levered but a bubble can be caused by over exuberance in equity as well. And Anthropic has that in spades.
Two sides of the same coin. A leveraged farmer buys tractors up front and can sow more land. That pays in a boom. The one who bootstrapped is “strangled” by being unable to go after land until they have cash. If demand falters, however, the second farmer—worst case—has idle tractors. The first owes payments he can no longer make.
Bringing it back to AI, Anthropic seems to show you don’t need massive leverage to at least compete. They did it with equity. It isn’t bootstrapping, like the example above, but it’s closer to that than the full tilt OpenAI has gone on.
Knowing what we know now, Anthropic came in underlevered. They should have borrowed a bit. Given OpenAI is missing sales targets [1], it seems they are probably overlevered. They have similar revenues and valuations. Put together, that makes OpenAI more bubble-esque.
> a bubble can be caused by over exuberance in equity as well. And Anthropic has that in spades
Agree. But putting aside idiots who may have levered their Anthropic equity, overvalued equity means you get to fight another day after a crash.
[1] https://www.wsj.com/tech/ai/openai-misses-key-revenue-user-t...
But Anthropic is not in a bubble, despite being valued the same as OpenAI, because they were more careful with compute, which they're paying a heavy price for now having to dumb down Claude Code.
So what do you think OpenAI should be valued at if they're in a bubble now?
I’m saying OpenAI are levered. If they’re levered and overvalued, they’re a bubble. If they aren’t overvalued, which is to say if they can beat their 2.3x target, i.e. $60+ billion in ARR, they played it savvily.
> But Anthropic is not in a bubble, despite being valued the same as OpenAI, because they were more careful with compute
Anthropic were more careful with debt and debt-like obligations.
> what do you think OpenAI should be valued at if they're in a bubble now?
You’re still conflating orthogonal points.
I think AI should be valued around a growth-adjusted revenue multiple [1] of 4 to 7x. (For context, tech was 2-4x 2015 to 2017, 4-7x 2018-2019, 6.7x in 2021, 3x in 2023, and has now settled back to around 5x for most companies.)
Using $30bn ARR for Anthropic (300% growth) and $25bn for OpenAI (130% growth), both based on the companies’ own projections—Anthropic’s 1,400% growth YoY makes historical figures a bit silly—we get $360 to $630bn for Anthropic and $130bn to $230bn for OpenAI.
I’d put a wide error bar on those figures. Which means I can’t reject their current valuations. Which is why I’m not arguing about who is and isn’t overvalued. The critical observation is Anthropic at $360bn is bruised but survives. OpenAI, even at $230bn and potentially much higher, is basically bankrupt. That is the difference between being overvalued and bubbled.
[1] PEG, but E is R
I fully expect OpenAI to grow faster the rest of the year due to higher compute capacity.
Sure. OpenAI needs to be doing $200bn in ARR by 2028 (versus company guidance of under $100bn) to make a PRG of 7x. Nobody thinks that's going to happen, which means its–and Anthropic's, though as we've seen to a lesser degree–are based entirely on multiple expansion.
If that multiple assumption is sustained, everyone wins. If it isn't, OpenAI goes bankrupt while Anthropic limps home. If you're still not seeing the difference between growth and overvaluation, on one hand, and the binary consequnces of leverage, on the other hand, and why one is intrinsically linked to bubbles popping (versus deflating), I can try to think of an analogy.
Sure thing [1]. February 2026.
[1] https://www.theinformation.com/articles/openai-projections-i...