It was Apple week and unsurprisingly even I got carried away and wrote a lot about Apple’s launch week. While the big high-end items were new MacBook Pros, the real story to me was the Fusion Architecture. But I am a chip-kinda guy. Sadly, Apple doesn’t give you the deep details, so one is left to postulate some well-reasoned ideas. So that is what I did.
Back in 2008, Steve Jobs said, “We don’t know how to make a $500 computer that’s not a piece of junk, and ou
It was Apple week and unsurprisingly even I got carried away and wrote a lot about Apple’s launch week. While the big high-end items were new MacBook Pros, the real story to me was the Fusion Architecture. But I am a chip-kinda guy. Sadly, Apple doesn’t give you the deep details, so one is left to postulate some well-reasoned ideas. So that is what I did.
Back in 2008, Steve Jobs said, “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that.” That was then. This is now. The company knows how to do this, and do this well.
The real strategic story of the week was Apple pushing value. Thanks in large part to its ability to make high-quality things at scale, I am sure it is also preparing itself for whatever economic doldrums are coming our way. It is also a good time to launch a full-frontal on Windows 11 and Chromebooks. On a more personal front, I am already in love with the new midnight blue Neo. I can’t wait to get my hands on it.
Here are seven articles worth your time this weekend.
25 Years of iPod Brain. Molly Mary O’Brien bought a fourth-generation iPod at 14 with cash earned pressing potatoes through a french fry cutter in Vermont. What follows is a love letter to the device that taught a generation how to build a relationship with music. I miss my iPod. She is right, the iPod’s gift was its constraint. That early tension between abundance and curation is something we crave so badly in the age of algorithmic gods. [Dirt]
The Secretive Company Filling Video Game Sites with Gambling and AI. An eight-month investigation by Aftermath into Clickout Media, a shadowy affiliate marketing company that has been buying beloved gaming sites like GamesHub, The Escapist, and Videogamer, then stuffing them with crypto casino links and AI-generated content under fake author profiles. Internet doesn’t need AI slop, when we already have humans ruining it for greed. [Aftermath]
“We See Everything.“ A joint investigation by Svenska Dagbladet and Göteborgs-Posten found that data annotators in Kenya, working for Meta subcontractor Sama, routinely review intimate footage captured by Ray-Ban Meta glasses. As a line from Casablanca goes, “I am shocked, shocked that there is gambling going on here.” [Svenska Dagbladet]
Anthropic and the Pentagon. Bruce Schneier cuts through the noise on the Anthropic-Pentagon standoff with the clarity nobody else brought to it. This is not really about one company being more moral than another. The real lesson is about the need for democratic structures and legal restrictions on military AI, not corporate heroism. [Schneier on Security]
$599. Not Junk. I love John Gruber’s take on new Macs. So, I was keen to read what he had to say about the MacBook Neo. He thinks Apple is going to sell a zillion of these. [Daring Fireball]
Reality Check. Everyone talks about the AI infrastructure buildout like it’s a done deal. It’s not. Sightline Climate is tracking 190GW across 777 large data centers announced since 2024. Of the 16GW slated to come online this year, only 5GW is actually under construction. Last year, 26% of expected capacity slipped. Their estimate: 30–50% of the 2026 pipeline won’t materialize. Meanwhile, hyperscalers are quietly giving up on the grid entirely, building their own power sources. The bottleneck isn’t chips. It’s watts. [Sightline Climate]
In Memoriam. Dave Farber, true Internet router. He was one of the most important people in the creation of the Internet, and he taught the people who did most of the work turning what he once called “a research project” into the backbone of modern communication. They don’t make people like Dave Farber anymore. [High Tech Forum]
Every gambler knows that the secret to survivin’ Is knowin’ what to throw away and knowing what to keep ‘Cause every hand’s a winner and every hand’s a loser And the best that you can hope for is to die in your sleepKenny Rogers, The Gambler.
I don’t know Masayoshi Son, and I don’t need to. But my guess is that the SoftBank founder and CEO can’t be having a good start to his week. The stock of his flagship, SoftBank, is deflating faster than
Every gambler knows that the secret to survivin’ Is knowin’ what to throw away and knowing what to keep ‘Cause every hand’s a winner and every hand’s a loser And the best that you can hope for is to die in your sleep
Kenny Rogers, The Gambler.
I don’t know Masayoshi Son, and I don’t need to. But my guess is that the SoftBank founder and CEO can’t be having a good start to his week. The stock of his flagship, SoftBank, is deflating faster than a balloon stuck in powerlines after a New Year’s party. He has bet big on OpenAI as his all-in wager. Whether he is right or wrong remains to be seen.
SoftBank’s shares dropped as much as 12.5 percent. Reports emerged that OpenAI and Oracle had scrapped plans to expand a flagship data center in Texas. Bloomberg reported the expansion fell apart over a combination of financing difficulties and shifting demand. The news undermines two core assumptions behind the entire Stargate Project. That alone should be reason to dig into every data center announcement and follow the money trail.
SoftBank’s credit default swaps widened. In plain English, the bond market is now charging more to insure against the possibility that SoftBank cannot pay its debts. The people who lend SoftBank money are getting nervous. Not a big surprise.
S&P, the credit rating agency, which already had SoftBank at junk, cut its outlook to negative earlier this month. A downgrade could raise borrowing costs precisely when SoftBank needs to borrow more than ever. These are legitimate problems. It also makes you wonder how SoftBank will meet its commitments to OpenAI in April 2026. I wrote about this last week, but even I didn’t know how much was up in the air.
I often refer back to my essay, The Announcement Economy, mostly because that is what we are living in. The details get lost in the bombast of headlines, and the media herd moves on to the next thing. Meme is the news, if news itself isn’t the news.
Let’s turn back the clock to January 2025. Stargate was announced with pomp and show that could rival Mardi Gras. President at the podium, Son and OpenAI’s Sam Altman flanking him. Big words, bigger promises. The beautiful future. Elon Musk, seemingly a sore loser for not being invited to the party, didn’t like it a bit. He said SoftBank “has well under $10 billion secured.” Altman fired back, called him wrong, and invited him to the Texas site. That Texas site is now the one being abandoned. Musk had obvious self-interest in undermining the project. He was also, turns out, right.
This is a good time to ponder the overall data center announcement frenzy. There is a level of insanity in all the news that keeps coming, and it deserves its own moment of skepticism.
I just read this New York Times piece about Nscale, a UK-based data center startup founded in 2024 that just raised $2 billion at a $14.6 billion valuation, with Nvidia backing and Sheryl Sandberg, Nick Clegg, and Susan Decker joining the board. The company barely existed two years ago. Its founder previously sold health supplements and worked in coal mining. Now he’s building “the engine of superintelligence.” Haven’t we seen this movie before? Different cast, similar theme with a charming, charismatic fundraiser and a board with more white shoes than an NBA star. Read the story and decide for yourself.
The irony of the name should not be lost on anyone. In model railroading, N-scale means 160 times smaller than the real thing. The real thing being a hyperscaler like Google, whose CEO told investors the company plans to spend up to $185 billion on infrastructure in 2026.
The data center buildout echoes the late 1990s fiber frenzy. Companies strung cable across continents for bandwidth nobody needed, on the assumption that demand would only go up and that the underlying technology would not change fast enough to matter. Both assumptions proved wrong. The chips will get faster. The models will learn to do more with less. The Excel chart pointing up and to the right rarely survives contact with Moore’s Law.
These are physical products, as much as they might seem like digital ones. You can’t put up walls faster than a query on ChatGPT. Neither can you get energy sources revved up on demand. Physics is physics, and atoms are atoms. It just doesn’t make for a good announcement.
Nscale is a UK company. Like everyone else, the UK is feeling left out of the AI buildout frenzy. Just like they did in the fiber buildout days. Don’t be surprised if you see more such announcements about upstarts raising billions from other parts of the world. No one wants to be left out of the announcement party.
The scale of the announcements is staggering. US data center construction starts hit $77.7 billion in 2025, a 190 percent increase over the prior year. The four largest hyperscalers are on track to spend north of $500 billion on infrastructure in 2026 alone. But announcements and reality are two different things.
The numbers bear this out. I recently pointed to a report by Sightline Climate that is tracking 190 gigawatts across 777 large data centers announced since 2024. As I noted in a recent post, of the 16 gigawatts slated to come online this year, only 5 gigawatts is actually under construction. Last year, 26 percent of expected capacity slipped. Sightline’s estimate is that 30 to 50 percent of the 2026 pipeline won’t materialize. Look, if hyperscalers are building their own data centers, we know they can. They have the money. They have customers. They have the domain expertise. They can even spin up their own power sources. Others feel more like Milli Vanilli. They sound good. But is it for real?
I am an AI believer. But boy, the green gas coming out of the announcement engine makes me blanch.
If you see skepticism in my recent writing about physical infrastructure, it’s because sometimes you have to follow the dollars. In my earlier pieces on the $110 billion funding round and the announcement economy, I laid out how the headline numbers didn’t really add up. The structure hasn’t changed. SoftBank is seeking a new $40 billion loan, the largest dollar-denominated borrowing in its history, to meet its OpenAI obligations. Son is doubling down.
To fund the earlier rounds, Son sold SoftBank’s entire Nvidia stake for $3.3 billion. Those shares would be worth well over $150 billion today. He traded one of the great unrealized gains in modern investing history for a 13 percent stake in a company that remains unprofitable, whose flagship data center partner just backed out citing weak demand, and which S&P now considers a liability on SoftBank’s own balance sheet.(1)
Son may still be right. Yahoo Japan, Alibaba, ARM. He has been early and right before. He has also been early and spectacularly wrong — see WeWork. But the structure underneath, borrowed money, illiquid assets, a portfolio more than half locked up, means the margin for error is far thinner than any announcement headline ever suggested.
It isn’t money until it’s money. And it isn’t infrastructure until someone actually needs it. Uses it. And pays for it. As Kenny Rogers put it:
You got to know when to hold ’em, know when to fold ’em Know when to walk away and know when to run You never count your money when you’re sittin’ at the table There’ll be time enough for countin’ when the dealing’s done
Footnote #1 (added on 3/10/26): I can see how my awkward sentence gives an impression that Son’s Nvidia sale funding OpenAI. The point I was making was that he has hyperactive style of a a gambler, and this is how he has ended up with OpenAI, and not with $150 billion if he knew how to hold them. Clearly my sentence structure could have been better.
Why I wrote this piece
SoftBank’s bet on OpenAI is starting to weigh SoftBank’s shares have nearly halved in four months as questions grow over the scale of its OpenAI exposure. The FT’s Lex column has some strong words. (FT)
The AI Data Center Boom’s Newest Billionaire Nscale, founded in 2024 by a former health supplements seller and coal miner, just raised $2 billion at a $14.6 billion valuation with Sheryl Sandberg, Nick Clegg, and Susan Decker on the board. The Times loves an outsider-looking-in story. (New York Times)
I had coffee this weekend with my good friend Michael Galpert, father to my godchildren. Too much coffee. We talked too much Claw. OpenClaw that is.
Michael has been running around the country organizing ClawCons. New York, Austin, Tokyo next. Not industry conferences. In the halcyon days of Web 2.0, we called them meetups and un-conferences. Sponsors are falling over themselves to get them attached to this new new thing, that borders on madness and hope.
Just people showing up in rooms b
I had coffee this weekend with my good friend Michael Galpert, father to my godchildren. Too much coffee. We talked too much Claw. OpenClaw that is.
Michael has been running around the country organizing ClawCons. New York, Austin, Tokyo next. Not industry conferences. In the halcyon days of Web 2.0, we called them meetups and un-conferences. Sponsors are falling over themselves to get them attached to this new new thing, that borders on madness and hope.
Just people showing up in rooms because they want to talk about what OpenClaw makes possible. Developers, yes. But also small business owners, retirees, students, people who have never attended a tech event in their lives. The energy in those rooms, Michael says, is unlike anything he has seen in years.
I have known Michael long enough to know when he is genuinely excited about something versus just being hyperactive for a second. He is so ‘clawed’ into OpenClaw.
Makes you wonder: what is really going on here? Hope and madness. Whatever the reasons, I am fascinated with the very idea of OpenClaw, how it might be foretelling a future we are not seeing yet.
OpenClaw is a free, open-source AI agent built by Austrian developer Peter Steinberger. It started as a weekend project in November 2025, originally called Clawdbot, went through a rename to Moltbot after a trademark complaint from Anthropic, and landed as OpenClaw at the end of January 2026.
You connect it to whatever AI model you prefer. It runs on your own machine. You talk to it through the messaging apps you already use, including Slack, WhatsApp, Telegram, iMessage, and Discord. And then it does things. Typical chatbots answer questions. It acts. It clears your inbox, makes reservations, tracks your calendar, executes tasks on your behalf while you are doing something else.
By March 2026, it had crossed 247,000 stars on GitHub. Steinberger has since been hired by OpenAI to work on personal agents, and the project has moved to a foundation. The lobster, as they say, has molted. Ironic, the movement’s Jesus has ceded control to his apostles.
Across the planet, everyone is tinkering.
China tech is going bonkers over OpenClaw. On a Friday afternoon in Shenzhen, nearly a thousand people lined up outside Tencent headquarters to get OpenClaw installed on their laptops. Engineers from Tencent’s cloud unit were helping students, retirees, and office workers set it up. The Chinese have their own phrase for it now: raise a lobster, a reference to OpenClaw’s red lobster logo.
Every major Chinese cloud provider has released its own version. Tencent has WorkBuddy. MiniMax has MaxClaw. Moonshot has Kimi Claw. Local governments in Shenzhen and Wuxi announced grants for startups building on the platform. MiniMax, whose model runs inside many OpenClaw setups, has seen its stock rise over 600 percent since its IPO two months ago.
And then Beijing sent a diktat to state banks, government agencies, and the families of military personnel: Clip the Claw.
A thousand people lining up on Friday. A memo from the CCP. Same technology. Same week.
It’s not nothing.
The Mac Mini has become the unofficial hardware of the OpenClaw moment. People are buying the Apple desktop with a single purpose: a dedicated machine to run their agent, separate from their main computer, connected to a free or cheap open-source model. The SF Standard called the Mac Mini bro the new matcha latte guy. Oy vey!
The publication shares the story of Aaron Ng, a 35-year-old AI engineer in the Sunset. He did not want to give OpenClaw access to his own computer. So he bought a Mac Mini just for the agent. It handles his email, tracks updates about his newborn, controls his smart lights. He texts it baby logs because, in his words, the existing apps were terrible. Others are using it to post their bets on Polymarket to Twitter and game the results.
Mac Mini bro! Apple has backed into a cultural moment, without even trying. Jokes aside, this physical object represents a philosophy. The intelligence lives on your machine. You own it. You aim it. No subscription. No permission required.
I checked in with Hiten Shah, one of my close friends who is building hard with OpenClaw. He summed it up in a single line: (AI) Power to the people.
This is why retirees are lining up in Shenzhen. This is why people with no GitHub account are showing up at ClawCons. For the first time, they can feel AI’s intelligence, even if it is not very good. Yet. Not a demo. Not a keynote promise. Not big boys burning billion dollars a month. A thing that actually does things on their behalf. The gap between what you want done and what gets done has always required either your own time or someone else’s labor. OpenClaw makes that gap feel smaller. That feeling, even in its rough and half-broken form, is new.
It has been almost a month since I published How AI Goes To Work. “What OpenClaw shows is how AI will work in the background,” is what I wrote. “And that is what the ‘AI’ future looks like for normal people. Not a separate AI app. Intelligence woven into tools you already use. Doing work you used to do yourself. Or used to hire someone to do, done by software.”
I have seen this kind of excitement before. Many times. That is what keeps me around in Silicon Valley. The excitement of new technology is my addiction. I saw this with the big poppa, the internet itself. Web 2.0. Social. Cloud. In terms of product, the closest parallel to OpenClaw for me is my first time with WordPress.
WordPress did not invent PHP or MySQL or web publishing. It was a continuation of someone else’s idea. However, it assembled those pieces into something a non-technical person like me could actually use. The gap between having something to say and being able to publish it closed overnight. No developer. No hosting deal. No media company gatekeeping who got a voice. Yes, there were other platforms and other options, but it dovetailed with the rise of open source, the optimism of publishing on the internet, and the joy of sharing and being social.
The best part that most people forget about WordPress is that it was never really about us. It was about the rest of the world that could not afford American software economics. At Forbes.com, we spent millions on bad software, trying to publish professionally. Now you could do it for free. A teacher in Jakarta. A student in Manila. A journalist in Nairobi. Suddenly they had the same publishing infrastructure as the New York Times. That is what the excitement was really about. Not the product. It was the collapse of the permission structure.
OpenClaw has that same siren call. Two hundred dollars a month, or even twenty a month, to Anthropic or OpenAI is not a rounding error for most of the world. The world doesn’t pay $10 for lattes. This is the real barrier. But Chinese-made Qwen runs locally. Chinese-made DeepSeek runs locally. OpenClaw does not care which model you plug in. So someone in Manila or Cairo or Bogota can run the same agentic setup as a San Francisco startup, on a model that costs them nothing. If you want something from Claude or ChatGPT, and you can afford to pay for it, then plug that in too.
WordPress democratized voice. OpenClaw is pointing at something further: action. The gap between what you intend and what actually gets done has always required resources. A team. A budget. An organization. OpenClaw is the first very rough sketch of closing that gap for everyone.
WordPress operated in a forgiving domain. A bad plugin broke your homepage. Mine broke all the time. And there were no plugins. OpenClaw operates in the domain of real-world action. A bad agent deletes your inbox, spams your contacts, creates a dating profile without your knowledge. The blast radius is different. One of OpenClaw’s own maintainers warned publicly that if you cannot understand how to run a command line, this is far too dangerous for you to use safely. That is not a ringing endorsement. But it is also not the point.
OpenClaw is not ready for prime time. The security issues are real and the warts are visible. It is a symbol of what is coming, not the thing itself.
AI can be personal. Not a service you subscribe to. Not a platform you visit. A thing that runs on your machine, serves your intentions, uses the model you choose, and works through the apps you already live in.
In his keynote speech at GTC, Nvidia CEO and founder Jensen Huang described OpenClaw as:
What is Open Claw? It’s an agentic system. It calls and connects to large language models.It has resources that it manages. It could access tools, it could access file systems, it could access large language models. It’s able to do scheduling. it’s able to– do cron jobs, is able to decompose a problem that you gave it into step by step by step. It could spawn off and call upon other subagents. It has IO. You could talk to it in any modality you want. It’s an operating system. I’ve just used the same syntax that I would describe an operating system. Open Claw has open sourced essentially the operating system of agentic computers.
In 2023, Bill Gates wrote that “in the near future, anyone who’s online will be able to have a personal assistant powered by artificial intelligence” and that agents would “utterly change how we live.” OpenClaw, running on a free Chinese model through WhatsApp on a $599 Mac Mini in the Sunset, is the first time regular people can actually feel that becoming real.
The Wall Street Journal recently reported that leadership wants OpenAI, the company, to focus. Seems like a plain old business strategy story. Nope!
First, in more prosaic terms, the all-hands and what was said was indicative of need for focus and urgency. I read it as mild panic stations. Second, step back enough and a clear and complete image should emerge. It reveals the real game being played. It is the grand hand at the big AI poker table. The IPO. Who gets there first, who sets the rul
The Wall Street Journal recently reported that leadership wants OpenAI, the company, to focus. Seems like a plain old business strategy story. Nope!
First, in more prosaic terms, the all-hands and what was said was indicative of need for focus and urgency. I read it as mild panic stations. Second, step back enough and a clear and complete image should emerge. It reveals the real game being played. It is the grand hand at the big AI poker table. The IPO. Who gets there first, who sets the rules. And who really wins.
The IPO is not about one company. Instead it is about three American AI companies — Anthropic, OpenAI, and SpaceX, which owns xAI. It is about the scale of money to be raised from the market. It is also the urgency to do so. The Economist notes that if all three offer 15 percent of their shares, the combined sum would roughly equal every dollar raised across all American IPOs over the past decade.
It is against the backdrop of a global crisis, and this being a battle for winner take all. And most importantly, with the Middle East busy with bigger problems, the money spigot for American AI might be as tight as the Strait of Hormuz right now. The Gulf sovereign wealth funds that have been backstopping this AI frenzy have other fish to fry, at present.
Public market investors in New York and London will now have to carry the weight. Which means the IPO window is real, it is short, it is now, and it will not stay open forever. In short, this is a three horse race to the IPO market. And OpenAI isn’t the leading pony.
OpenAI was all over the map. Sora. A web browser called Atlas. A hardware device. TikTok-for-AI. All announced with the same breathless urgency, same press release energy, different product each time. Cashing in on the announcement economy.
Simo told staff last week they had to stop being distracted by “side quests.” That is a remarkable word for what was, in practice, an $840 billion company running several unrelated experiments inside itself while its most focused rival ate its lunch.
All startups, big and small, are messy. Some have more disorder than others. The admission of chaos is a way to show recognition, and eventual correction of the problems. The question to me, is why this admission of chaos? And that’s why you need to bring out the popcorn.
Let’s break down the WSJ news report itself. The fact that the Journal “reviewed” the transcript is a giveaway. The Journal didn’t say they had the transcript, or that it was leaked to them. “Reviewed by” is a tell. This is a controlled leak. Nothing wrong with it.
Companies do it often. Big publications like the Wall Street Journal get the scoops and exclusives. This is a game that has been played for the longest time. Every word attributed to Simo, from “side quests,” to “code red,” to the Anthropic “wake-up call,” was chosen for outside consumption, to shape the story.
Don’t get me wrong. While the actual new content of the story is thin, it is still real. The organizational dysfunction is real. The Sora team was housed under research while launching a consumer product — a good sign of that dysfunction. However, the Anthropic “wake-up call” framing is a classic Jedi mind trick. Admit competitive weakness to look clear-eyed to investors and customers, while simultaneously using a rival’s success as the proverbial carrot and the stick.
However, one has to read the story in a larger context. The WSJ report has to be read against other news this week. Reuters reports OpenAI is in advanced talks with TPG, Advent International, Bain Capital, and Brookfield to create a new joint venture valued at around $10 billion that would push its enterprise products through PE-backed portfolio companies across industries. It is forming “Frontier Alliances” with McKinsey, BCG, Accenture, and Capgemini, announced last month. This is a great narrative being put together for a company on a deadline, for a specific audience. OpenAI is great at building narratives. It might back its way into a long-term strategy, but for now, you have to see every piece of news coming out of OpenAI right now as part of a jigsaw puzzle.
There is one audience for this final picture. The bankers and institutional investors who will price the offering. OpenAI needs them to believe three simple things. It has its house in order. It has a real swing at corporate dollars. And that it is ahead in the AI race, both for consumers and corporations.
One thing odd, maybe just to me, is why OpenAI has been stuffing its ranks with former Facebookers who are known to juice growth, find edges, and keep people addicted. They have little background in getting enterprises to buy into a product. Simo herself ran the Facebook app. That organization’s genius is consumer engagement: behavioral hooks, dopamine loops, the relentless optimization of the feed. You can see that in the recent iterations of ChatGPT. It has become such a sycophant, and creates answers and options, that you end up engaging with it. That’s juicing growth. Facebook style.
The next shoe to drop would be news that OpenAI poached some big name executives from say, Salesforce or one of the big boy SaaS companies to take charge of the enterprise push. Right now, OpenAI’s own numbers show that its enterprise business generates $10 billion out of a total annualized revenue of $25 billion. In comparison, Anthropic, the smaller company, is widely regarded as ahead in enterprise adoption.
Why is all this important? Again, as I said, money. I know I am repeating myself. The public market money. That is the only real story. There are three AI companies heading toward public markets. Two have friends in Washington. One has a great satellite launch and Internet business. One has focus. One is perceived as an “all over the map” business.
Zoomed in, there is a reason why Grok and OpenAI are looking to go after the “code” business. Anthropic’s success is good enough proof that AI, despite all the talk of impending singularity and AGI, is all about software — the critical choke point in a digital-first world. That is the business. For now! Not orbital data centers. Not a social video app. Not a hardware device. All these may (or may not) be real money spinners in the future, but for now, you gotta focus on juicing your revenues to go public. Focus is the answer.
Anthropic’s revenue run rate has surged past $19 billion, up from $9 billion at the end of 2025 and roughly $14 billion just weeks before that. Amodei confirmed at Morgan Stanley that $6 billion was added in February alone, driven almost entirely by Claude Code. Revenue doubling in two months. That is the curve that makes a prospectus compelling without a PR campaign to explain it.
The US government has tried to change that calculus. Defense Secretary Hegseth declared Anthropic a supply-chain risk after it refused to give the Pentagon unrestricted access to its models. Altman positioned OpenAI as a bridge-builder while quietly moving to take Anthropic’s vacated government contracts.
Anthropic has no friends in Washington. What it has, in the immortal words of former Microsoft CEO Steve Ballmer, is “Developers, Developers, Developers.” Right now, developers are the ones who actually matter. Despite its somewhat unclear messaging and occasionally awkward public identity, Anthropic’s Claude Code is a product they want to use. Wallet always speaks the loudest.
I won’t be crying over OpenAI. They are doing $25 billion in annualized revenue, with 900 million weekly users, and a CEO who has proven he can bend a narrative to his will.
As I said before. When a grand hand is being played, focus is not such a bad thing. Especially when the billions you desperately need are on the line.
When it comes to OpenAI, smart money is starting to do the math out loud. And something doesn’t add up. On surface, today’s news that OpenAI is offering 17.5% guaranteed returns to private equity firms looks like a shot at the Anthropic threat. Scratch the surface, and you start to see the story behind the story.
The PE deal is the kind of deal you do when you’ve borrowed against the future and the future is taking longer than expected.
Remember a few weeks ago when Nvid
When it comes to OpenAI, smart money is starting to do the math out loud. And something doesn’t add up. On surface, today’s news that OpenAI is offering 17.5% guaranteed returns to private equity firms looks like a shot at the Anthropic threat. Scratch the surface, and you start to see the story behind the story.
The PE deal is the kind of deal you do when you’ve borrowed against the future and the future is taking longer than expected.
Remember a few weeks ago when Nvidia CEO Jensen Huang (one of the backers of OpenAI) said that OpenAI was not a well-run business. Now Thoma Bravo founder Orlando Bravo is saying it out loud. Bravo walked away from the JV idea after questioning the long-term profit profile. It is not a coincidence that two smart money operators are arriving at the same conclusion. Just different words.
As I wrote in yesterday’s newsletter, (and in my breakdown of Nvidia GTC, Jensen’s Trillion Dollar Token Factory, for CrazyStupidTech) we are at an inference inflection. What that means is that AI goes from being in the “capex” phase to being in the “opex” phase. That shift is why you see Anthropic adding a billion or so in revenue every week or so. And that is why OpenAI is in a tizzy. And that is why Elon Musk has made “coding” a top priority for his Grok. All three companies are about “business” and revenues and not just promises.
OpenAI is good at promises. Especially the promises of a limitless future. And it has done a good job of borrowing against that future. Except, that future isn’t arriving or arriving fast enough.
It announced the $110 billion funding round, while only about $25 billion was near-term committed capital. Stargate was a $500 billion infrastructure promise. Oops. Each of these moments followed the same logic. Project confidence so large that the world treats it as reality. The reported PE deal is just the latest version of the same story.
The question to ask is why is OpenAI willing to guarantee 17.5 percent return? What gives. My harsh read of the situation is that the company needs money, and private equity is the last large pool of capital it can tap. And that tells you something about how many other doors OpenAI has already knocked on.
Here I go again with more questions than answers.
When I look at the news about the joint ventures, I read it as OpenAI cannot afford the cost of selling to big companies on its own. Deploying engineers to customize models for clients is expensive, slow, and margin-destroying. The joint venture shifts that cost onto PE firms while they think they’re buying access. They’re not. They’re picking up the actual cost of the work, dressed up as a partnership. It is a smart move, especially when you are preparing for a public offering.
Here is the line buried in the Reuters report that you should read again and again. The joint venture structure would provide “clearer segment reporting that can support the IPO narrative.”
Loosely translated (and financial analysts would be better to break this down), the JV structure allows OpenAI to create a line item that makes it look like it has recurring enterprise revenue, which is exactly what IPO bankers need to justify a valuation of a trillion dollars. The real product here is not AI. It is an IPO prospectus.
Maybe I am completely off base. There is almost certainly something we don’t know. There might be a product breakthrough that changes everything. OpenAI has surprised before.
However, it is hard to ignore that both Jensen and Bravo raised issues around OpenAI as a business. After all, no healthy business needs to offer terms that OpenAI is offering. You know why this is happening. It is because the need for cash is real. And the need to go public and get that cash is even more real. That 17.5 percent guarantee is just a magic number in magic math.
An update to More Magic Math from OpenAI
The final mad dash to IPO is on for the big AI companies. SpaceX, OpenAI, and Anthropic have all made their intentions clear. And nothing could be more obvious about OpenAI’s intent than today’s new funding announcement. A few things have changed since I wrote that piece. Some confirm my thesis, and one surprise, though not really.
So, the company says the round closed. $122 billion in committed capital, up from the $110 billion
The final mad dash to IPO is on for the big AI companies. SpaceX, OpenAI, and Anthropic have all made their intentions clear. And nothing could be more obvious about OpenAI’s intent than today’s new funding announcement. A few things have changed since I wrote that piece. Some confirm my thesis, and one surprise, though not really.
So, the company says the round closed. $122 billion in committed capital, up from the $110 billion announced in February. Does committed mean money has passed the transom? We won’t know. What we do know is that at a post-money valuation of $852 billion, the anchors are Amazon, Nvidia, and SoftBank. Microsoft participated again, though not clear for how much. The additional $12 billion came from a who’s who of institutional money, including a16z, Sequoia, BlackRock, Blackstone, Fidelity, Temasek, D1, and Dragoneer. The FOMO gang!
So many brand-name investors show up at the last minute because none of them want to miss out on the sweet IPO pop. It surely will win them points with their own (limited partner) investors. I guess FOMO is also an affliction for the super rich.
By the way, nothing puts more in “t “less is more,” than more itself. In 2024, OpenAI raised $6.6 billion and sold about 4 percent of the company. In 2026, they raised $122 billion, twenty times more, by selling roughly 14 percent. Existing insiders and early employees must be in heaven.
To be clear, the circular financing problem hasn’t gone away. Amazon’s $50 billion is tied to an eight-year AWS contract. Nvidia’s contribution is compute, not cash. When I wrote about this in March, it was just an observation. Now it has a name. Bloomberg, Reuters, and others are now calling it “circular financing.”
OpenAI says it now has a $4.7 billion credit line from JPMorgan, Goldman Sachs, Citi, Morgan Stanley, and Wells Fargo. That’s not a lending syndicate. That’s an IPO underwriter roster auditioning for the job. It reminds me of those lining up outside Don Corleone’s room on his daughter’s wedding day. The credit facility is the gift they bring to get in the room.
Now let’s talk about the fix. The $3 billion in investments from individual investors. Axios reports that they are customers of three of the largest banks. Wait, the same three large banks that extended the credit facility and want to be part of the IPO underwriting syndicate. More circular economy at work.
OpenAI CFO Sarah Friar told Axios, “We are really trying to take to heart our mission, which is AGI for the benefit of humanity and thinking about access. Not just access to the technology, but also access to the economic upside that it’s driving.” That’s a nice line. It’s also an IPO marketing strategy.
OpenAI said it will be included in several ARK Invest ETFs. Cathie Wood, who previously invested in OpenAI through her venture arm, now gets to channel her retail base into pre-IPO OpenAI shares. Think about what that is. A private company, not yet public, getting into retail ETFs. That’s a new thing. It’s smart, too. You create demand before the IPO. You distribute the story. You make millions of people feel like they have skin in the game before you even file. That’s the fix.
ARK is overrated, to put it mildly. ARK’s flagship fund peaked in February 2021, then fell 75 percent. Five years later, a thousand dollars invested then is worth about $573 today. And ARK is the vehicle OpenAI chose to democratize the upside. Make of that what you will.
One last thing. OpenAI is quietly pivoting, shutting down Sora, its much-hyped video app, and concentrating resources on a “superapp” for developers and business users, with coding assistants at the center. Why? Because enterprise is exactly where Anthropic is eating their lunch. The $122 billion has bought more time to beat the competition. And did you notice that CFO Friar is doing all the press versus Sam?
You focus this hard because you want to go public. Fast. After all, you don’t want to be the one without a chair when the music stops. Your move, Dario!
“A newspaper is not only a collective propagandist and a collective agitator, it is also a collective organiser.” — Vladimir Lenin
In 1902, Lenin argued that his revolution needed a newspaper of its own, and that newspaper was (unironically) named Pravda, which means truth in Russian.
“The standard communications playbook just doesn’t apply to us. We’re not a typical company. We’re driving a really big technological shift.” — Fi
“A newspaper is not only a collective propagandist and a collective agitator, it is also a collective organiser.” — Vladimir Lenin
In 1902, Lenin argued that his revolution needed a newspaper of its own, and that newspaper was (unironically) named Pravda, which means truth in Russian.
“The standard communications playbook just doesn’t apply to us. We’re not a typical company. We’re driving a really big technological shift.” — Fidji Simo, 2026
Simo, OpenAI’s CEO of Applications, explained this to OpenAI staff as to why OpenAI had just bought TBPN. Different century. Same logic to explain an emerging new socioeconomic order, a new post-revolution reality.
To recap, OpenAI, weeks if not months before its public offering, has acquired the Technology Business Programming Network (TBPN). It is a daily, three-hour live tech talk show hosted by founders Jordi Hays and John Coogan. The show had 58,000 YouTube subscribers, $5 million in revenue last year, and a cult following in Silicon Valley. It was profitable, had no outside investors, and was growing fast. As a former media person, any media exit is a good exit. Congratulations to the founders.
Now let’s dig into what OpenAI really bought and why.
Think of TBPN as a room. A room where people in tech come and talk openly, without having to worry about the antagonistic queries that big media is often posing them. They go because it feels like peers talking, not press interrogating.
If you lived through Internet 1.0, CNBC’s morning show had the same vibe. ESPN’s SportsCenter did the same for the cable sports revolution. They don’t speak to power. They amplify power. TBPN made that playbook its own.
The best part of the announcement is where TBPN sits inside the OpenAI org and who it reports to. The show sits under “strategy” (and not communications) and will report to Chris Lehane. He is OpenAI’s chief political operative, the man associated with coining “vast right-wing conspiracy” as a deflection tactic during the Clinton White House years, who built Fairshake, the crypto super PAC that spent hundreds of millions targeting anti-crypto candidates in 2024.
You don’t put an editorially independent media property under your political operative. That’s not a media strategy. That is part of overall strategy. But they still have to sell it as keeping it editorially independent. Pravda was technically editorially independent too.
Anyway, maybe I have lost my rose-tinted glasses, but when a company says “do no evil,” you know what they are going to do. And if a press release mentions editorial independence four times, you know where that is going. And if you have to invent a new phrase, “Editorial Independence Covenant,” then I don’t really need to spell it out for you.
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society.” — Edward Bernays, Propaganda, 1928
Bernays, who was Sigmund Freud’s nephew, invented the PR industry. He thought of it as a key part of corporate design. He was hired by corporations such as United Fruit and American Tobacco to do exactly what OpenAI is doing now. Build the perception layer around a product by presenting it as a massive societal shift.
The Soviet term was agitprop. The Silicon Valley term is earned media strategy. A century apart, history still rhymes.
Related Reading
OpenAI: The Fix Is In — How OpenAI is engineering its IPO narrative through circular financing and retail ETFs.
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