Dear Reader,
Today I’d like to talk about AI.
A new report came out on OpenAI’s new funding.
It really made me start to think about momentum.
We’ve been debating…
Is the AI story on pause?
What’s the big rally with rare earths?
Where are we going with this and that?
And it’s becoming really hard to make an argument against AI picking up momentum again in 2026.
OpenAI just locked down two deals, announcing a billion-dollar investment from Disney and a $10 billion investment from Amazon.
They’re in talks to raise $100 billion at a $750 billion valuation.
It’s crazy.
That would be 50% higher than OpenAI’s last stock sale just in October. Three months - 50% higher.
Here’s a company doing $19 billion in annualized revenue - their current run rate - and insiders expect it’s going to raise $30 billion by next year. And they ultimately project $200 billion in annual revenue by 2030.
But the company needs to keep raising money because it’s forecasting that it’ll burn $26 billion this year and next… $100 billion over the next four years building out data centers, training models, developing products.
It’s very interesting. When you pull the camera back and look at the competitive landscape you have OpenAI locking down the consumer AI space.
You have Anthropic, which seems to be the front-runner in the business AI space.
You have Google’s Gemini trying to attack both.
You have Meta AI, xAI.
So, OpenAI, we see they have the funding to do what they’re setting out to do. It’s very expensive to make a product that scales like this.
They have the funding.
So does Anthropic, backed by Amazon.
Google’s own Gemini has the funding - Google has the most-profitable ad business on the planet. It’s basically a cash machine.
The question coming up now is, “does Meta get its AI to scale? Does it get it off the ground?”
And with Elon Musk’s xAI, what actually happens there?
How much money are they going to pour into this?
And which battle does Elon want to fight?
The AI battle against all these deeply well-funded competitors?
Or does he want to battle for robotaxis, etc.?
He’s dealing with a multi-front war.
We have this hot, fevered funding situation going on right now.
I remember Ben Graham in his book, Security Analysis, saying you could always tell the end of a bull market by the quality of companies going public.
Next year you have on tap to go public SpaceX and Google’s self-driving car company, Waymo.
They’re trying to raise a billion dollars at a $100 billion valuation.
OpenAI is also in talks to go public.
As a matter of fact, the money they’re raising now at the $750 billion valuation some have suggested could be a bridge investment for them to go public.
So the AI race, when you look at the intensity of it from big investors still backing the horses…
You have companies like Amazon placing bets everywhere.
They’re going to back OpenAI and Anthropic.
Google Gemini is doing their own thing.
You have a bunch of other companies that are just backing everybody. Placing bets all along the table just to see where they land.
The intensity of that has not slowed down at all.
And I’ll tell you something…
I use ChatGPT primarily myself.
I use Gemini, Grok, a bunch of things. But ChatGPT has become my daily for whatever reason.
They’ve added a great little feature…
Every day, they create articles on what my interests are based on prior chats.
I’ll tell you something - it’s like having an assistant that sits down with you and shows you the articles you need to read that day.
Fascinating stuff.
So, for the first time in the past week and a half I’ve started to say to myself, gosh, this is actually becoming an even better tool than it was before.
One of the first things I’m opening now is my ChatGPT to see what the summary is for the day as I’m engaging with it.
Interesting stuff.
Anyway, that’s all I have for you today, this Friday.
I hope you have a wonderful weekend.
I’ll see you Monday.
“The Buck Stops Here,”