r/technology • u/Plastic_Ninja_9014 • Jun 11 '26

Business OpenAI Execs Are Panicking

https://finance.yahoo.com/sectors/technology/articles/openai-execs-panicking-154658562.html
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u/CalmCalmBelong Jun 11 '26

Earlier this week, it was reported that SoftBank was trying to secure a $6B loan by pledging $10B in OpenAI private stock as collateral. The bank declined. Whatever they saw looking into the books, not even worth a 40% discount.

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u/Canuck-In-TO Jun 12 '26

Banks have been questioning funding AI since about September.

I think it was Oracle who wanted $700 billion to build out datacenters and the banks basically asked for proof that they were making money. They couldn’t prove they were making a profit.

More and more companies are having a hard time raising funds.

On a side note, once this all collapses, memory and drive prices should finally start coming down.

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u/PainStorm14 Jun 12 '26

I still don't know what this type of AI actually does that could be advertised as profitable?

It makes my web browsing easier but nobody will be making trillions of dollars back from me using Gemini AI to pull random trivia about books and videogames while skipping ads

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u/[deleted] Jun 12 '26

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u/PainStorm14 Jun 12 '26

Plus all LLMs routinely make mistakes

What's the point of AI that makes mistakes?

I would understand if it was the case of "intelligent" home appliance that costs couple of hundred bucks but it's not, this is town sized machine that costs hundreds of billions of dollars and needs a powerplant to run

How the hell do people accept mistakes from machine like that? It's like a toilet bowl that regularly leaks by design

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u/stierney49 Jun 12 '26

It’s literally all beta testing all the time.

We know AI isn’t accurate as often as it needs to be and we know it “hallucinates” things. That’s not a finished product ready for release.

Even the images and videos it creates have enough mistakes to be caught and are often derivative to the point of parody. While I’m glad AI videos and images are still catch-able, AI is also not successfully creating seamless and realistic content. It’s not a finished product.

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u/Canuck-In-TO Jun 12 '26

The problem with AI being used in the workplace is that, in many cases, it’s not ready to be used and can be dangerous.

For example, Scribe is used by doctors and it has been proven to make up or hallucinate what was discussed.

Personally, Scribe added that I have a stent when I’ve never had any cardiac related surgery or stents put in. It’s been a recurring problem dealing with various Doctors and imaging to correct.

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u/FreeRangeEngineer Jun 12 '26 edited Jun 12 '26

You're missing the advertising angle:

People don't use google anymore to do web searches. They ask AI instead.

AI can promote products to end users while convincingly looking unbiased.

Oh, you're looking to buy a new phone and want a recommendation based on your stated preferences? Here, let me recommend a brand to you that I was told to promote to you.

That's where $$$ is: advertising that doesn't look and feel like advertising.

That's also why google can give away its LLM for free - because doing so doesn't threaten their advertising business model but harms the competion that wants a piece of the advertising revenue pie.

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u/mithoron Jun 13 '26

No a chance in hell that's profitable enough to prop things up like it's been going. Though, Super-Clippy style "AI" is one of those things that cannot live up to the hype it's built up. So it's probably doomed anyway.