'Someone is going to lose a phenomenal amount of money' says OpenAI CEO Sam Altman about unwise AI investment. 'When bubbles happen, smart people get overexcited about a kernel of truth'

Sam Altman testifying on capital hill. — (Image credit: Getty Images - Anadolu Agency)

OpenAI CEO Sam Altman spoke to assembled reporters at a dinner in San Francisco late last week on the topic of, you guessed it, AI, the applications of AI, and the vast sums of money moving behind the scenes to fund it. Despite being one of the most vocal advocates of the tech, Altman had some words of caution for investors jumping on the artificial intelligence train.

According to The Verge, Altman said it was "insane" that AI startups consisting of "three people and an idea" are receiving huge amounts of funding off the back of incredibly high company valuations, describing it as "not rational behaviour."

"Someone is going to lose a phenomenal amount of money. We don’t know who, and a lot of people are going to make a phenomenal amount of money,” said Altman.

That being said, Altman stopped short of calling investment in AI overall a bad idea for the economy in general: “My personal belief, although I may turn out to be wrong, is that, on the whole, this would be a huge net win."

Well, it certainly appears to cost a whole lot of moolah just to keep the good ship OpenAI afloat. The company has raised staggering sums of cash over the past decade to develop and run its various AI implementations, the most famous of which being ChatGPT. Reports last year indicated that OpenAI had spent $8.5 billion on LLM training and staffing for its generative AI efforts, while other analysts have predicted it costs $700,000 a day to run ChatGPT alone.

A still from a video demonstrating how large Meta's planned Hyperion data center would be if it was place on Manhattan island — A CG render of Meta's planned Hyperion data center, superimposed over Manhattan. (Image credit: Meta)

Still, those spending figures don't appear to be in the trillions yet, although that estimated sum is perhaps of little surprise to those of us that keep an eye on AI data center expansion.

Given that Altman's rival, Elon Musk, has been booting up and expanding xAI's Colossus supercomputer with incredible speed, and with the news that Meta is expanding its data center operations at such a rate it's currently having to house a significant portion of its racks in nearby tents, OpenAI will feel the need to keep up—and to do that it needs to spend (and raise) huge amounts of cash over the next few years.

One would assume that Altman is confident enough in his company's efforts to place its investors on the "going to make phenomenal sums of money" side of things, but his comments should perhaps serve as a warning to those looking to jump in with both feet without correctly judging the landing. Someone has to lose in the great AI race, I suppose. And as to which companies survive, and which come to a sticky end? That remains very much an open question for now.

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Andy built his first gaming PC at the tender age of 12, when IDE cables were a thing and high resolution wasn't—and he hasn't stopped since. Now working as a hardware writer for PC Gamer, Andy spends his time jumping around the world attending product launches and trade shows, all the while reviewing every bit of PC gaming hardware he can get his hands on. You name it, if it's interesting hardware he'll write words about it, with opinions and everything.

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