FROM THE FRONTIER
OpenAI has signed billions in compute deals. Is the company getting too big to fail?
OpenAI is growing faster than any startup in history, burning billions, and growing deeply ingrained in the tech economy — what happens if it fails?
The numbers are making experts nervous. OpenAI has reportedly committed to hundreds of billions in deals this year, including $100 billion to build The Stargate Project, $300 billion for Oracle compute, and tens of billions more with Nvidia, AMD, and Amazon. The problem? OpenAI reportedly may have lost $11.5 billion last quarter.
OpenAI’s web of dependencies. What separates OpenAI from other cash-burning startups is its reach. If OpenAI fails, the damage won’t stop at its shareholders. It’ll cascade across the entire tech sector. Microsoft, which owns 27% of OpenAI, takes a direct hit. Oracle loses its anchor tenant. Nvidia’s growth narrative also falters. It’ll hurt most of the tech sector, which has broader implications for the economy.
Tech’s growing economic importance. Tech and AI have also played an outsized role in economic growth, with data centers driving nearly all of America’s GDP growth in the first half of 2025. In 2008, only Microsoft ranked among America’s 10 largest companies. Today, 7 of the top 10 are tech firms. If the AI boom stumbles, the entire economy will feel the effects.
The case for optimism. ChatGPT is the fastest-growing consumer application in history, with over 800 million users and billions in revenue. The industry’s willingness to work with OpenAI signals that they view it as transformational, not speculative. Federal Reserve Chair Jerome Powell also recently said that he does not currently see a dotcom-style bubble forming in AI, pointing to real economic activity underpinning the investments.