As Trump prepares to take office, tech overlords are bending the knee and kissing his ass in public. Billionaires like Mark Zuckerberg are already way richer than they were on Monday. And Elon Musk is now one of the most powerful people in the world. Woe be upon any of Musk’s long held enemies. Woe be upon Sam Altman and OpenAI, a tech lord whose company is burning money and bridges and may end up being one of the biggest losers in Trump’s second term.
Altman and OpenAI were already on track to be one of tech’s biggest losers in 2024 before Trump won and took office. OpenAI is a giant furnace that burns money and electricity. ChatGPT—the company’s premier product—is popular with students and people who can’t be bothered to write their own emails, but there’s only so many people willing to pay $20 a month for a chatbot. OpenAI crows about how many users they have, but most of those users just cost them money.
Most users don’t pay the subscription fee for ChatGPT. They’re freeloaders. But every little search they do or picture they generate burns cash. OpenAI is set to lose $5 billion this year. Documents reviewed by The New York Times predict that running those machines will cost $37.5 billion a year by 2029.
Where is the cash and computing power coming from to fuel OpenAI? Mostly Microsoft and there’s early indications that the tech giant is done with OpenAI’s shit. OpenAI is a weird company. It has a non-profit board that controls a for-profit company. Its explicit goal is to build an artificial general intelligence. Ilya Sutskever, the company’s former chief scientist and a former member of the board, treats AGI as a religious figure. He burned effigies of demonic anti-human AI in the office and led workers in ritualistic chants.
At the end of last year, Microsoft was spooked after the board—led by Sutskever—ousted Altman. Altman came back, but the damage was done. Over the past year the relationship between OpenAI and Microsoft has frayed. Microsoft isn’t giving the AI startup the computing power and cash it thinks it needs to make a god in the machine and its spreading out its bets.
The company’s that will survive the AI bubble, for it surely is one, are those that pivot to enterprise solutions and meaty government contracts. Meta’s Llama models are open source and it announced earlier this week that it’s partnering with other tech companies, the U.S. government, and the Pentagon. On Thursday, Anthropic announced it was teaming up with Palantir and Amazon Web Services to provide AI tools to the DoD and U.S. intelligence agencies.
OpenAI’s rivals seem to understand that AGI is a phantom that burns money and the real money is in defense. What’s OpenAI doing to get in on this? It partnered with government contractor Carahsoft to sell ChatGPT licenses to the government. According to Forbes, it hasn’t gotten in with the Pentagon yet but it did sell $108,000 in licenses to NASA and $100,000 to the Department of Agriculture. Thrilling stuff and chump change for a company that says it’ll soon need $40 billion a year to keep the lights on.
We don’t know what role Musk will play in the future Trump administration. But we do know Musk hates Altman. The feud is legendary. “I am the reason OpenAI exists,” Musk said in an interview with CNBC in May 2023. Musk was an original investor in the company back in 2015 but fell out with the company.
Since leaving, Musk has repeatedly tried to sue OpenAI and claimed that the company has turned away from its original mandate to safely build AGI. The lawsuits have called out Altman by name. In response, OpenAI published emails between it and Musk that revealed what it said was the truth of the matter. Musk wanted to be in charge of the whole project and was pissed when OpenAI wouldn’t merge with Tesla and give him full control.
That was back at the beginning of the first Trump administration. Now we’re about to start the second and Musk is in good with the President-elect. Altman scraped and bowed, of course. “Congrats to President Trump. I wish for his huge success in the job,” he said in a post on X. “It is critically important that the US maintains its lead in developing AI with democratic values.”
Altman should probably bow and scrape to Musk. The man is appearing in photographs with Trump’s family, controls a company sending rockets into space and revolutionizing satellite communications, and owns a social media platform that played a decisive part in the U.S. election. He’s number one on Bloomberg’s list of the 500 richest billionaires.
Altman doesn’t even make the list.
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