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Gov. Ron DeSantis (R) expressed concerns regarding OpenAI’s critical importance to the economy and the broader tech ecosystem.
On Sunday, in a post on X, DeSantis signaled his unease, citing a Wall Street Journal piece that asked if the AI giant was becoming “Too Big To Fail,” as it grows increasingly intertwined with other U.S. tech giants, which either rely on its AI models or are funding its massive infrastructure buildout to power said models.
“A company that hasn't yet turned a profit is now being described as Too Big to Fail,” DeSantis said, adding that it was primarily owing to it being “interwoven with big tech giants.”
DeSantis’ post echoes growing concerns regarding the concentration of digital power in AI, with a handful of companies defining the narrative.
This comes amid OpenAI’s plans for an initial public offering that could value it at $1 trillion, making it one of the largest IPOs in history, despite never having turned a profit.
OpenAI’s recent deal with NVIDIA Corp. (NASDAQ:NVDA), which involves the chipmaker investing in the company, which in turn will be used to buy the latter’s chips, alongside a similar deal involving Oracle Corp. (NYSE:ORCL) for its cloud infrastructure, has sparked concerns regarding the creation of a “circular” investment loop.
Investor Martin Shkreli, however, has dismissed such concerns, saying that critics have failed to grasp how value is created with such partnerships.
In a post on X, Shkreli noted that the way to measure success in such partnerships is through “non-party demand,” which essentially refers to demand from users or customers that are neither investors nor partners with the companies.
Shkreli notes that this demand remains “pretty high,” with millions of global users on OpenAI’s platforms and an unrelenting appetite for NVIDIA’s prized GPUs.
Nvidia shares were down 0.16% on Friday, closing at $202.49, but are up 0.71% overnight. The stock scores high on Momentum, Growth and Quality in Benzinga’s Edge Stock Rankings, with a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
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