Why OpenAI’s Latest Firestorm Makes a Strong Case for Remaining Private
Another day, another AI ethics scandal—but this time, it's got Wall Street whispering about IPO prospects.
OpenAI's recent stumbles reveal the brutal calculus of public markets versus the cushioned world of VC funding. When every misstep gets magnified 100x, who needs quarterly earnings calls?
The tech giant finds itself at a crossroads: double down on its 'responsible AI' mantra or face the relentless scrutiny that comes with being a publicly traded company. Meanwhile, crypto VCs nod knowingly—this is why we HODL through bear markets.
One thing's clear: in the age of viral outrage, sometimes the smartest algorithm is staying private. Just ask the bankers who'll have to wait another year for their IPO fees.
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In fact, at a Wall Street Journal event, Chief Financial Officer Sarah Friar said that OpenAI wanted the U.S. government to provide “loan guarantees,” which some interpreted as a bailout funded by taxpayers. The backlash was quick, which led Friar to clarify on LinkedIn that she had misspoken and that her comment was misunderstood. Soon after, CEO Sam Altman also denied that the company was seeking any kind of financial backstop from the government.
Nonetheless, the timing was awkward, as OpenAI was already under pressure to explain how it plans to fund its $1 trillion spending goal. That tension boiled over in a podcast last week when investor Brad Gerstner asked Altman how OpenAI could afford such massive spending. Altman appeared irritated by the question and shot back, “Brad, if you want to sell your shares, I’ll find you a buyer.” The clip quickly spread online, and while Friar said the company isn’t working on an IPO and is focused on growth, the exchange fueled concerns that AI companies like OpenAI may be taking on more than they can handle.
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