Too big to fail or, in English, “too big to fail.” It is a theory of economics and finance which argues that certain corporations, especially banks, are so large and so interconnected that their failure would have catastrophic consequences for the global economy and therefore must be rescued by governments. The speech gained traction in the 2008 financial crisis and is beginning to sound again from the mouths of NVIDIA and OpenAI, no less.
Government support. At an event of WSJSarah Friar, CFO of OpenAI, stated that the company will not go public in the short term (she says until at least 2027) and that its priority is growth and investment in R&D, above profitability. The most striking part of his speech was when he said that they hope that the government will support the financing of future agreements related to data centers. That OpenAI is burning astronomical amounts of money to lead the AI race is something we have been discussing for a long timebut it is the first time that they directly appeal to the state to guarantee it.
Shortly after, Friar collected cable in a post on LinkedIn: “OpenAI does not seek government support for our infrastructure commitments. I used the word ‘support’ and that confused the message,” but the seed was already planted.
Depreciation. OpenAI is closing deals to secure computing capacity. We have seen it with his alliance with NVIDIAwith amdwith Broadcom and more recently with amazon. The complexity of the situation is that the depreciation rates of AI chips remain uncertain. As it says Washington Post’s Gerrit de Vynck in XOpenAI is going to need the best chips to be at the forefront of the AI market, but financing this demand is not the same if the life cycle of the chips is seven years, as if it is only two years.
The money is flowing, the question is for how long. In this uncertain scenario, government support would act as a safety net so that banks and private equity firms would feel more comfortable and continue releasing billions for OpenAI.
China will win. NVIDIA is also appealing for government involvement in subtle ways. In a Financial Times event in London, Its CEO Jenshen Huang has warned that “China is going to win the AI race.” Their arguments are that China has more flexible regulation and government subsidies for the energy your data centers needthat It is not little.
This energy advantage allows China to compete even if they cannot buy NVIDIA’s most powerful chips. Huang doesn’t say it directly, but it is a clear wake-up call: either you subsidize the energy our data centers need or China will win.
The fear. The question has been hanging over the air for a long time: Are we witnessing a new bubble? The investor Michael Burry thinks soand he is not just any investor, he was the one who made gold when the real estate bubble burst in 2008 (the movie ‘The Big Short’ is based on his story). The thing is, Burry just bet short against NVIDIA, which recently It was valued at 5 billion dollars. Fear of the bubble continues to grow, according to a Coatue report and the number of fund managers who believe we are in a bubble increased to 54% in October, up from 37% in July this year.
Numbers. The fear is not at all unfounded and all you have to do is take a look at the numbers. Account Tomás Pueyo in Uncharted Territories that the economy should be in recession, but the numbers show the opposite and AI is behind this growth. The S&P 500 index is through the roof and 48% of this growth corresponds to AI-related stocks. The share price is far above what it was in the dotcom bustall with ridiculous benefits.
And that’s not all, the economic growth of the United States in 2025 is due almost entirely to the construction of data centers for AI. According to the Economist Jason Furmanwithout taking data centers into account, the GDP of the United States would have grown only 0.1% in 2025. The creator of the newsletter Today in Tabs He gave a very graphic example: “Our economy could be reduced to three AI data centers in trench coats.”
Tightrope. Returning to OpenAI, its financial director assured the Financial Times that it could be profitable simply by stopping investing too aggressively since it has a “very healthy” margin structure. The thing is, they can’t do it. OpenAI needs to achieve AGI, its great promise and the only thing that could justify this insane investment. If it fails, will cause a shock wave that can impact NVIDIA, AMD, Oracle… and end up dragging down the global economy.
The competition tightens, Anthropic is eating the business market’s toast and Google is not only winning every time more users with Geminireached record revenue in the last quarterwhile OpenAI lost $11.5 billion in the same period. It doesn’t look good.
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