{"id":674964,"date":"2025-11-05T00:00:00","date_gmt":"2025-11-05T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/11\/05\/a-silicon-valley-tragedy-act-ii\/"},"modified":"2025-11-05T00:00:00","modified_gmt":"2025-11-05T00:00:00","slug":"a-silicon-valley-tragedy-act-ii","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/11\/05\/a-silicon-valley-tragedy-act-ii\/","title":{"rendered":"A Silicon Valley tragedy, Act II"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> ? <strong>\u201cIf you want to sell your shares, I\u2019ll find you a buyer,\u201d <\/strong>Sam Altman <a target=\"_blank\" href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/dcce9caa-2f0f-4e6b-8af3-fb3d1ab24fed\/a-silicon-valley-tragedy,-act-i\" style=\"\" rel=\"noopener\">snapped<\/a> at investor Brad Gerstner when questioned about how OpenAI could justify USD 1.4 tn in spending commitments against USD 13 bn in revenue. \u201cI think there's a lot of people who [...] would be thrilled to buy shares,\u201d he added on the venture capitalist\u2019s <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=Gnl833wXRz0\" style=\"\" rel=\"noopener\">podcast<\/a> (runtime: 74:20). \u201cWe could sell your shares or anybody else's to some of the people who are making the most noise on Twitter about this very quickly.\u201d He added that he wishes OpenAI were public so critics could short the stock: \u201cI would love to see them get burned on that.\u201d<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>It\u2019s a remarkable response from a CEO whose company lost USD 12 bn last quarter<\/strong> <strong>\u2014<\/strong> combative rather than explanatory, focused on proving critics wrong rather than demonstrating that the business works. Altman frames his circular financing arrangements as necessary innovation. At a Texas data center site, he <a target=\"_blank\" href=\"https:\/\/www.nytimes.com\/interactive\/2025\/10\/31\/technology\/openai-fundraising-deals.html\" style=\"\" rel=\"noopener\">argued<\/a>, \u201cWhat really drives a lot of progress is when people also figure out how to innovate on the financial model.\u201d But innovation and desperation can appear very similar\u2026 until the bill is due.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Withdraw<\/strong><strong>ing<\/strong><strong> before the fall?<\/strong> Last week, OpenAI completed a long-awaited restructure, transforming from a nonprofit into a forprofit public benefit corporation valued at <a target=\"_blank\" href=\"https:\/\/www.forbes.com\/sites\/antoniopequenoiv\/2025\/10\/28\/openai-establishes-for-profit-company-in-restructuring-change-involving-microsoft\/\" style=\"\" rel=\"noopener\">USD 500 bn<\/a>. The move allows investors to hold equity for the first time, and clears the path for an initial public offering. Despite <a target=\"_blank\" href=\"https:\/\/www.reuters.com\/business\/openai-lays-groundwork-juggernaut-ipo-up-1-trillion-valuation-2025-10-29\/\" style=\"\" rel=\"noopener\">reports<\/a> that OpenAI is preparing for an IPO at a USD 1 tn value as early as 2026, Altman denied having any specific timeline, telling Gerstner, \u201cWe don\u2019t have a date in mind, we don\u2019t have a board decision to do this.\u201d But the restructuring conveniently allows the kind of liquidity event that could let early investors and executives withdraw their investments before the business model proves itself \u2014 or doesn\u2019t.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>If OpenAI can significantly improve AI technologies and expand revenue over the next <\/strong><strong>several years<\/strong> <strong>\u2014<\/strong>and if investors hold out that long \u2014 Altman\u2019s financial innovations could prove prescient. Microsoft CEO Satya Nadella defended the AI mogul\u2019s execution on the podcast, claiming that the company has \u201cbeaten\u201d every business plan it provided to Microsoft.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>But if technological progress stalls \u2014 <\/strong>or if the improvements don\u2019t translate to paying customers \u2014 OpenAI and its many partners could lose enormous amounts of money. Smaller companies caught in the tide like CoreWeave, which are taking on enormous debt to build data centers almost entirely dependent on OpenAI, could go bankrupt. Oracle could see its USD 29 bn in forecast losses materialize. The ripples could spread across the global economy, particularly given how concentrated tech stock ownership has become. Bernstein Research Analyst Stacy Rasgon put it starkly: Altman \u201chas the power to crash the global economy for a decade or take us all to the promised land.\u201d<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>When Gerstner asked his direct question about how the numbers add up, <\/strong><strong>Altman\u2019s response revealed more than he likely intended. <\/strong>It was the response not of a confident leader, but of a kingpin who views scrutiny as insubordination \u2014 someone who has internalized the myth of his own inevitability so deeply that questioning the fundamentals feels like betrayal. It was also exactly the kind of response that led Ilya Sutskever to write the <a target=\"_blank\" href=\"https:\/\/gizmodo.com\/former-openai-exec-explains-why-he-tried-to-do-a-coup-against-sam-altman-2000680769\" style=\"\" rel=\"noopener\">52-page memo<\/a> that warned of Altman\u2019s tendency to undermine his execs. The memo cost Sutskever his position at OpenAI when Altman returned to power after being briefly ousted by the board.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Altman isn\u2019t the first so-called visionary to go mad with power \u2014 he <\/strong><strong>appears<\/strong><strong> to be following in Elon Musk\u2019s footsteps.<\/strong> Musk has been promising self-driving cars \u201cnext year\u201d for <a target=\"_blank\" href=\"https:\/\/www.jalopnik.com\/elon-musk-tesla-self-driving-cars-anniversary-autopilot-1850432357\/\" style=\"\" rel=\"noopener\">over a decade<\/a>. He promised to <a target=\"_blank\" href=\"https:\/\/www.npr.org\/sections\/thetwo-way\/2016\/09\/27\/495622695\/this-afternoon-elon-musk-unveils-his-plan-for-colonizing-mars\" style=\"\" rel=\"noopener\">colonize Mars<\/a> during our lifetime. He promised <a target=\"_blank\" href=\"https:\/\/www.inverse.com\/innovation\/hyperloop-closed-test-track\" style=\"\" rel=\"noopener\">Hyperloop<\/a> would revolutionize transportation. He promised that Tesla's Cybertruck would be <a target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2019\/11\/22\/tesla-smashes-bulletproof-pickup-trucks-windows-with-a-metal-ball.html\" style=\"\" rel=\"noopener\">bulletproof<\/a> and dominate the market. Both men understand that in Silicon Valley the size of your vision matters more than your ability to execute it. Both have perfected the art of making grand promises that questioning them feels like wagering against human progress itself.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>And they both respond to scrutiny in the same way. <\/strong>Musk has spent years taunting short sellers on Twitter, now X, calling critics \u201c <a target=\"_blank\" href=\"https:\/\/www.nbcnews.com\/news\/world\/elon-musk-calls-thai-cave-rescue-diver-vern-unsworth-pedo-n891651\" style=\"\" rel=\"noopener\">pedos<\/a>,\u201d and responding to legitimate questions about Tesla\u2019s finances with mockery and hostility. When analysts asked reasonable questions on Tesla\u2019s earnings call, Musk <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/news\/innovations\/wp\/2018\/05\/03\/please-sell-our-stock-elon-musk-clashes-with-wall-street-during-epic-earnings-call\/\" style=\"\" rel=\"noopener\">called<\/a> them \u201cboring, bonehead\u201d questions and moved on. Musk has made virtually identical statements about Tesla short sellers for years, celebrating when they lose money, turning financial analysis into personal warfare. He even sold \u201cshort shorts\u201d on Tesla\u2019s website to mock critics. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Multiple former Tesla executives have described similar behavior: <\/strong>Musk setting <a target=\"_blank\" href=\"https:\/\/www.greencarreports.com\/news\/1103939_tesla-deadlines-aren-t-meant-to-be-met-musk-says-they-just-pressure-employees\" style=\"\" rel=\"noopener\">impossible<\/a> deadlines, pitting <a target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2018\/10\/19\/tesla-ceo-elon-musk-extreme-micro-manager.html\" style=\"\" rel=\"noopener\">teams<\/a> against each other, <a target=\"_blank\" href=\"https:\/\/www.warren.senate.gov\/imo\/media\/doc\/final_-_warren_letter_to_tesla_board_re_musk_conflicts_of_interest.pdf\" style=\"\" rel=\"noopener\">promising<\/a> different things to different stakeholders, and creating a <a target=\"_blank\" href=\"https:\/\/www.ineteconomics.org\/perspectives\/blog\/musk-and-tesla-corporate-compensation-financialization-and-problem-of-strategic-control\" style=\"\" rel=\"noopener\">culture<\/a> where questioning his decisions meant losing your job. Musk has similarly survived multiple attempts to rein him in. Tesla\u2019s board has been criticized as a <a target=\"_blank\" href=\"https:\/\/www.cbsnews.com\/news\/experts-say-tesla-board-may-have-too-many-ties-to-ceo-musk\/\" style=\"\" rel=\"noopener\">rubber stamp<\/a>. Twitter\u2019s board tried to resist his takeover, then capitulated.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The pattern repeats: initial resistance, followed by complete surrender to the visionary\u2019s will\u2026 and inevitable financial loss.<\/strong><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Ironically, the feud between Altman and Musk has grown increasingly public<\/strong>, with Musk recently taking shots at Altman over the weekend, <a target=\"_blank\" href=\"https:\/\/fortune.com\/2025\/11\/03\/sam-altman-openai-public-short-sellers-stock-get-burned-ipo\/\" style=\"\" rel=\"noopener\">alleging<\/a> he \u201cstole a nonprofit.\u201d Altman responded, \u201cI helped turn the thing you left for dead into what should be the largest nonprofit ever.\u201d <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>But Altman\u2019s financial strategy mirrors Musk\u2019s approach at Tesla and SpaceX \u2014 <\/strong>complex arrangements where his own companies <a target=\"_blank\" href=\"https:\/\/fortune.com\/2024\/04\/20\/elon-musk-companies-tesla-spacex-x-boring-bill-expenses-leo-koguan-shareholder-meeting\/\" style=\"\" rel=\"noopener\">buy from each other<\/a>, where investors are also customers, and where the line between business and circular financing blurs. Analysts have long <a target=\"_blank\" href=\"https:\/\/www.thecooldown.com\/green-business\/tesla-stock-valuation-insanity-investment\/\" style=\"\" rel=\"noopener\">noted<\/a> that Tesla\u2019s stock valuation has become disconnected from actual company performance, with growth priced into the stock far exceeding financial results. And both frame financial engineering as <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/business\/economy\/teslas-feat-of-financial-engineering\/2013\/09\/20\/c4d4667e-e26a-11e2-a11e-c2ea876a8f30_story.html\" style=\"\" rel=\"noopener\">visionary<\/a> rather than what it often is: a way to keep the machine running when fundamentals don\u2019t support the valuation.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The Musk-ification of Altman is the ultimate classical tragedy:<\/strong> Leader promises everything, insiders warn about his patterns, warning is ignored\/punished, evidence mounts that insiders were right, leader grows defensive as reality intrudes, and the fall becomes inevitable. Et tu, AI?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Altman \u201chas the power to crash the global economy for a decade or take us all to the promised land\u201d<\/p>\n","protected":false},"author":1,"featured_media":674965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7215],"tags":[7094,8651,633,638,639],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-674964","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-your-commute","tag-ai","tag-business","tag-enterprisepm","tag-for-your-commute","tag-technology","wpautop","entry"],"acf":{"mongo_id":"a8e42cda-4a87-42c2-9aa7-8f636fad4df4","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/11\/383.jpg","photo_position":"above","homepage_title":"","full_issue_title":"A Silicon Valley tragedy, Act II","related_issue":[674959],"teaser":"Altman \u201chas the power to crash the global economy for a decade or take us all to the promised land\u201d","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/11\/.0e87bb64-ad91-447d-9ea6-fa458a2a0d2d.mp3"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - 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