This Is How OpenAI Goes Broke

Today on Prof G Markets, Ed Elson sits down with Sebastian Mallaby to discuss why he believes there's a real chance OpenAI runs out of money within the next 18 months, and what that would mean for the broader AI industry. He also explains why he doesn't necessarily see Meta's decision to sell excess compute capacity as a bear signal, why he was encouraged by the Trump administration's new AI policy, and how he expects the AI race to unfold over the coming years. Sebastian Mallaby is a prominent journalist, author, Pulitzer Prize finalist, and senior fellow at the Council on Foreign Relations. His latest book is The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence. Subscribe to the Prof G Markets newsletter: https://links.profgmedia.com/markets-... Order Notes On Being A Man now! https://amzn.to/4nl4VKo Timestamps: 00:00 Intro 00:45 Today's episode 01:28 Interview with Sebastian Mallaby 01:48 What do you make of the recent OpenAI news and do you hold to your prediction? 05:55 Was the IPO delayed over concerns that people would see how the company actually works? 07:05 How does Anthropic compare to OpenAI from a business model perspective? 10:10 Is AI going to be that story or is that different? 14:08 Who's gonna make this an interesting technology that makes money? 17:18 If OpenAI runs out of money, what do you think the outcome would be? 21:03 If OpenAI runs out of money and Trump bails them out, what comes after that? 25:16 What would you make of that argument? 27:10 Ad break 28:38 Why do you think we can’t beat China on AI? 33:32 What is your view on AI policy with China? 35:23 How do you view the shift toward cheaper Chinese AI models and its policy implications? 38:09 How does distillation work, and why has it helped Chinese AI scale? 42:13 Would stopping Chinese AI distillation solve America’s AI challenges? 44:05 Ad break 44:22 What did you learn about the inner workings of these AI labs and why can't they figure that stuff out? 49:19 What do you think of Trump’s approach to AI oversight and safety? 52:18 So is the solution to get in a room with Xi Jinping and become partners in tackling this together? 55:01 Why did Trump do a 180 on his AI policy? 58:08 What did you learn about AI leaders, and who do you think will win the race? 01:01:14 Credits Follow Scott on Instagram:   / profgalloway   Follow Ed on Instagram, X and Substack:   / ed_elson_     / edels0n   https://substack.com/@edwardelson Subscribe to Prof G Markets on Spotify: https://links.profgmedia.com/markets-... Got a question for Prof G? Get answers on TikTok: https://links.profgmedia.com/tiktok Want more Prof G? Check out everything we're up to at: https://links.profgmedia.com/home Send us your questions or comments by emailing [email protected] Note: We may earn revenue from some of the links we provide. #business #news #tech #financemotivation #stockmarket #profg #scottgalloway #edelson #profgmarkets #ai #earnings #stocks #inflation #investmentstrategies #investment #investing #gdp #tariffs #2026