“Big Short” investor Michael Burry is issuing a fresh warning, believing that ChatGPT creator OpenAI will witness the same fate as the once-dominant web browser Netscape.
In a new post on X, the famed contrarian investor says that Sam Altman’s OpenAI downfall is inevitable as it continues to burn through its cash stockpile.
Burry adds that Microsoft’s backing is keeping the lights on at OpenAI.
“Everyone that knows anything knows this. OpenAI is the next Netscape, doomed and hemorrhaging cash. Microsoft is trying to keep it afloat while keeping it off the balance sheet and sucking out the IP.”
But for now, Burry says that OpenAI is still getting a lot of investments because the AI boom needs a massive liquidity event that will supercharge the hype cycle and trigger FOMO among other investors.
“So why do they keep getting funded? The whole industry NEEDS a $500 billion IPO ASAP.”
During the dot-com bubble, Netscape quickly became a symbol of early internet mania, soaring to massive valuations before collapsing under competitive pressure, steep losses and a business model that could not withstand commoditization. Back then, Microsoft triggered the downfall of Netscape by releasing the Internet Explorer for free with every copy of Windows.
In September, reports emerged that OpenAI had made spending commitments to the tune of $1.4 trillion, while generating an estimated $13 billion this year. When Altimeter Capital’s Brad Gerstner questioned Altman during an interview about the company’s aggressive spending posture, the CEO became defensive and told Gerstner that he would find a buyer for his OpenAI shares.
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.