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What you need to know: OpenAI is betting big
High stakes – Sam Altman is going all in. interview after Monday deal with with AMD, bringing OpenAI's total deal volume this year to approximately 1 trillion dollarsAltman said OpenAI is making a “company-wide bet” that now is the time to “spend a lot on infrastructure.”
OpenAI's CEO hopes that the more chips the company invests in training AI models, the more useful they will become—and the more people will be willing to pay for them. The deals provide OpenAI chips through chipmakers AMD and Nvidia, and data centers through cloud computing provider Oracle. It will have a staggering 20 gigawatts of computing power, which will be used to train and deploy OpenAI models. first portions of these should appear online in 2026.
Lack of power, uncertain payments – One missing piece of the puzzle is how OpenAI will power all these chips. it will take 20 nuclear reactors supply 20 gigawatts of power, but the AMD and Nvidia deals don't mention where all the power will come from. The US has already faced serious power shortage in the face of growing demand for AI.
An even more ominous uncertainty is how OpenAI will justify its increasingly convoluted bets. “It's a very reasonable question to ask because the amount of money being spent here is enormous,” says Richard Shannon, an analyst at Craig-Hallum. Critics worry about the cyclical nature of the deals: Nvidia is investing in OpenAI, which is spending money on Nvidia chips; OpenAI receives a stake in AMD in exchange for purchasing AMD hardware. Nvidia is “earning such huge profits” that it can afford such an investment, Shannon says.
OpenAI, on the other hand, worked with loss in the amount of $7.8 billion in the first half of 2025. They need a return on their investment in AMD, “otherwise it will be very difficult,” Shannon says.
The company will have to increase revenue from about $13 billion in annual revenue at least $300 billion by 2030 to justify current spending. If OpenAI's exponential revenue growth compared to last year two years Either way, that goal will be achieved in 2028, meaning Altman's current bets may look genius in retrospect. But if the exponential curves falter, the bets that now involve most of the world's most valuable companies could be worth far more than a single company and threaten the entire economy.
Rare earths – On Thursday, the Chinese government shook up those plans by announcing restrictions on exports of rare earth metals, which are needed to power artificial intelligence systems. “If pursued aggressively, this policy could mean a 'lights out' for the AI boom in the US and would likely lead to a recession/economic crisis in the US in the short term,” Dean Ball, former AI adviser in the Trump White House, wrote on X.
Altman will certainly have a hard time achieving exponential revenue growth if he struggles to obtain the materials needed to power his systems. He and the rest of the artificial intelligence industry will need some support from President Trump, who will meet with Chinese leader Xi Jinping in South Korea later this month for a crucial conversation about ongoing trade tensions between the two superpowers.
Who to Know: Nathan Benaik
Snapshot in time – Benaich, a venture capitalist at Air Street Capital, co-authors the annual State of AI Reportfor the eighth year already. 2025 editionwhich was released yesterday, is a comprehensive examination of the use of AI in research, industry and policy. This year, it is noted that the overall use of artificial intelligence has increased significantly. According to a survey of 1,000 “highly educated adult professionals,” 95% use AI in their professional and personal lives. Coding is the most common use case, followed by content generation and knowledge extraction. There are many other interesting points in the report if you have an hour (or ten!).
The Rise of AI NIMBYSM – Each year, Benaich and his team make a series of forecasts for the following calendar year. (In 2024, they got five out of 10 correct answers.) One of their predictions for 2026 is that “DATA CENTER NIMBYism”—the idea that community response to the construction of nearby data centers will “take the US by storm” and even influence some 2026 election races.
“There are many reasons to fear or loathe AI data centers,” Benaich writes TIME in an email, highlighting electricity rate hikes and the stress tipping point. He adds that with few local or federal restrictions, community backlash has been an “effective means” of slowing data center construction.
However, Benaich says that while many of the community's concerns with data centers are legitimate, “the US cannot afford to move data center development overseas and lose geostrategic benefits. This wave of investment may have kept the US out of recession.”
Bubble? — Benaich's State of AI report also draws attention to the growing number of “circular AI deals,” as detailed in the first section of this newsletter. However, he rejected the idea that we are in a dangerous artificial intelligence bubble. “Unit economics appear reasonable, and circular investments remain a small part of overall investment,” he wrote to TIME.
AI in action
Did the world's biggest pop star use artificial intelligence tools to release her album? Earlier this week, Taylor Swift released a treasure hunt for fans, consisting of a series of short videos. But eagle-eyed fans found traces of what they believe to be the use of generative AI, including strange finger movements. Although Swift has yet to clarify whether the videos were indeed created by artificial intelligence, fans reacted with displeasure, posting the hashtag “#SwiftiesAgainstAI.” The relevant videos were later removed from the YouTube shorts.
What we read
Enshittification, Cory Doctorow
This week, author Cory Doctorow published a book Enshittificationwhich reflects the slow—and inevitable, he argues—decline of online platforms such as Facebook, Google and Uber due to distorted corporate incentives. In Doctorow's understanding of 21st century technology, AI is the logical and dangerous endpoint of this trend. “The most important thing about AI is not its technical capabilities or limitations,” he writes. “What matters most is the story of investors and the ensuing mania that led to an economic disaster that will harm hundreds of millions or even billions of people.”
