Premium: The Silicon Valley Bubble (Part 2)
The article discusses the author's exclusive report on OpenAI's audited financials for 2024-2025, revealing that the company spent $34 billion while generating only $13.07 billion in revenue, sparking debate about the sustainability of such spending in the tech industry.
Background
- Ed Zitron is a tech journalist and critic who publishes the newsletter "Where's Your Ed At," known for skeptical deep-dives into Silicon Valley companies. He recently obtained and published OpenAI's audited financials for 2024-2025 — a rare, concrete look inside a famously secretive company.
- Those numbers showed OpenAI spending ~$34 billion while generating ~$13 billion in revenue, a massive loss that raises questions about its valuation and long-term viability.
- This is part two of a series arguing that Silicon Valley is in a financial bubble: startups and big tech firms are valued based on hype and future promises rather than sustainable business fundamentals, with AI companies like OpenAI as the prime example.
- The broader context: OpenAI has become the most prominent symbol of the AI boom, attracting tens of billions in investment (including from Microsoft) despite not yet proving it can turn a profit — a pattern Zitron sees as reminiscent of the dot-com crash.