Names like Nvidia, Microsoft and Palantir Technologies collectively lost about $400 billion in market value—and much of the blame is being placed at OpenAI’s door.
A Massive Infrastructure Bill
OpenAI’s CFO, Sarah Friar, ignited the firestorm when she suggested that the U.S. government might step in to “backstop” loans helping to fund the company’s huge infrastructure commitments. Those comments quickly drew backlash. for example, David Sacks publicly opposed the idea, saying there will be no federal AI bailout. Shortly after, Friar clarified her statement and CEO Sam Altman reiterated the company—and taxpayers—shouldn’t foot the bill for poor business choices.
Behind the headlines is a staggering figure: OpenAI has reportedly committed around $1.4 trillion within the next eight years to build out its AI infrastructure—bringing together partnerships with Nvidia, AMD, Oracle Corporation and adding a fresh $38 billion deal with Amazon Web Services (AWS) this week.
Strong Projections, Weak Reality
OpenAI claims it will generate more than $20 billion in annualised revenue this year and is expanding monetisation efforts—such as through its “Sora” app.
But digging deeper, the outlook appears far less rosy: the company posted a loss of approximately $12 billion in the last quarter, despite being valued at roughly $500 billion.
Financial analysts remain sceptical. For instance, Citi Group estimates that OpenAI might only generate about $163 billion in revenue by 2030—a sum that falls well short of what’s needed to justify its existing commitments. That uncertainty has investors asking: has OpenAI over-promised and will it under-deliver?
The Wider Impact on Markets
The ripple effects are showing up beyond OpenAI alone. Investor sentiment toward high-growth sectors—especially AI and cryptocurrencies—has turned cautious. As a result, the Nasdaq Composite is flirting with correction territory while Bitcoin recently slipped below $100,000 twice in one week.
Analysts are warning that the sell-off may deepen: weak market breadth combined with a negative Relative Strength Index (RSI) divergence suggest a potential further 10 % drop. After months of buoyant optimism about AI, it appears the market is beginning to sober up and confront the facts.