OpenAI's fall from grace as investors race to Anthropic
latimes.com
latimes.com
And somehow instead of prosecuting the lead in all areas, they got all hubristic and sloppy and just failed to iterate on the core product, while also failing to respond quickly when Anthropic showed that coding agents are the flywheel that makes the whole company faster.
It’s like they thought they had an unassailable monopoly and speedran to the lazy incumbent position, all in a matter of months.
On podcasts his attitude is basically “oh yeah all of you are basically fucked our products will take everyone’s jobs in a couple years.”
Altman is a lot more coy and comes across as saying what’s politically expedient at any given point in time.
I also appreciate his honesty, and don't really understand why the others don't emulate it because there's no cost to them to be honest. At every level of society we've decided to stick our heads in the sand and pretend like this very large tsunami isn't racing toward the coast, so as someone producing this technology you can be honest (and mostly ignored by people in denial), or be cagey and mistrusted (like Sam Altman).
“It’s so dangerous, we’ve reached AGI, we just have to release models that are obviously incapable of abstraction for your safety”
Funnily enough, the same thing can be used against those who criticize his view on AI. I wonder if there is a word for this.
It should have become clear to all that he was an untrustworthy person when he was fired from OpenAI by its then-board. My understanding is their complaint was he was lying, untrustworthy, and manipulative; and enough stories came out at the time to confirm that.
I've however been on the receiving end of some very odd board behavior and most founders I know have a story or two as well. I don't always take board decisions at face value. Reality is often askew, personality disorders run rampant in places of power, and there can be unknown incentives at play.
Brockman and his wife were the biggest donors to Donald Trump's Super PAC, MAGA Inc., in 2025 with each of them donating US$12.5 million. Brockman and his wife also donated $50 million to Leading the Future, a super PAC dedicated to AI deregulation that he helped found with Andreessen Horowitz co-founders Marc Andreessen and Ben Horowitz.
Codex btw is getting very competitive. It is fast and no longer far behind.
We’re talking on the level of meta, google and probably more if they keep raising money.
They really went all in with hubris and they’re gonna get punished eventually.
Most importantly, Uber did not have fast-depreciating cars on its balance sheet - OAI meanwhile is planning to spend the GDP of a mid-size nation on owning fast-depreciating datacenters, which they deem necessary to cope with the demand for their services.
Token generation is the metric Jensen Huang keeps pushing to temper analysts, which also affect nvidia’s future expected cash flows of course.
If increasing the price causes that metric to drop, the whole narrative falls apart and fear will spread in the stock market.
They’re all racing very close to the edge. Some closer than others.
1) Business: LLMs become essential to every company, and you become rich by selling the best enterprise tools to everyone.
2) Consumer: LLMs cannibalize search and a good chunk of the internet, so people end up interacting with your AI assistant instead of opening any websites. You start serving ads and take Google's lunch.
3) Superhuman AGI: you beat everyone else to the punch to build a life form superior to humans, this doesn't end up in a disaster, and you then steal underpants, ???, profit.
Anthropic is clearly betting on #1. Google decided to beat everyone else to #2, and they can probably do it better and more cheaply than others because of their existing infra and the way they're plugged into people's digital lives. And OpenAI... I guess banked on #3 and this is perhaps looking less certain now?
5.4 Extra high >> Opus 4.6
I find that for human in the loop Gemini beats both.
It doesn't help that Google offers a bunch of confusing plans in multiple places. I ended up just pasting all their AI plan URLs, at least that I could find, into Claude so I didn't have to figure it out.
https://knowledge.workspace.google.com/admin/getting-started...
They have multiple offerings, they probably will kill some of them very soon. There is no reason to waste your time and money on Google.
I've finished (as in: it's done, it works, and I may never need to change it again) entire projects with ChatGPT and Codex. Sometimes it takes a lot of hand-holding to get there, but it does get there and (with the exception of 4o) it's been improving since the beginning.
In contrast: I can't even get Gemini Pro to give me any answers to the most primitive questions that aren't caked in prima facie lies without at least 4 interactions, in any context, ever. The output is consistently and ridiculously garish with its insessant self-contradictions. It seems to be impossible to actually get anywhere with it.
What am I doing wrong here?
In all seriousness, I use Codex for work and Claude at home, and I feel like nowadays they're actually pretty competitive with each other. I don't know that it's that far behind.
I agree that they clearly erroneously assumed that no one would be able to catch up with them, though. OpenAI had such a head start that that should have been by itself a moat.
Check dev spaces like twitter and discord and all anyone talks about is claude-code, openclaw, opus 4.6 etc.
The mindshare went to anthropic.
This week I’ve been hitting CC rate limits, and I switched to Codex with virtually no disruption to my workflow. It’s not good for Anthropic that I was able to do that!
I wrote about it here: https://tombedor.dev/open-source-models/
Even now when I hear Codex I have to stop and think “oh yeah that’s OpenAI’s competitor to Claude Code.”
https://www.cnbc.com/2026/02/12/anthropic-gives-20-million-t...
I do think I do a good job of being very structured at breaking down my requirements and acceptance criteria (thanks dual lives as a devops and SRE guy and then PM). Extensive unit testing, discipline in use of sessions and memories and asking it to think of questions it should be asking me before even formulating a plan.
On the other hand, I think Claude is more friendly/readable and also still better at producing out-of-the-box nice looking frontend.
I think this is where we might have differing opinions. I'm a CTO by profession and I know what bad code is, so it is quite easy for me, based on my professional experience, point out when Claude generates bad code. And when you point it out, or ask it why it didn't take the correct/simpler approach - the response is always along the lines of "Oops, sorry!" or "You're absolutely right to question that..."
I’m so confused. Your link shows they are pushing for guardrails, what is bad about that? It is consistent with Anthropic safety-first principles, and what Dario wrote and talked about for the past decade or so? Could you be more direct with your criticism? Otherwise it’s hard to engage with
> ChatGPT most of the time one-shots complex solutions in comparison
is an intelligible sentence.
Paraphrased: ChatGPT often completes complex solutions in one try whereas Claude does not (or performs less well).
I guess you can’t take me seriously?
I shit on OpenAI because they had a completely clear path to being dominant in consumer and enterprise, in chatbot and coding agent, and in text, image, and video. And somehow they screwed it up by being unfocused, unnecessarily slimy, drama-ridden, and slow to react to the market.
OpenAI has a lot of good tech and some good product. They may yet succeed. But they embody the lazy hare partying with celebs while the tortoises pull ahead in the race.
Is there any equivalent for turning an AI LLM into a sticky platform? Right now seems like it’s pretty easy to use harnesses and tooling across models, including open weight and locally running ones.
Not with AI specifically. Having a large, private, data store (e.g. GMail, Google Drive) is the biggest advantage.
Long term, my feeling is Anthropic's focus on enterprise is the most obviously lucrative but also least defensible application of LLMs. If (more likely when) open source models reach the point of being "good enough" then it's a race to the bottom on pricing. Maybe it will be like AWS vs GCP et al, but I kinda doubt it.
OpenAI is fine with those as long as they are "legal"... So pretty much they don't care at all.
I agree Anthropic is no saint but it's much, much better than OpenAI.
Now mind you a trendline is a predictor and the trends don't always travel in a line. The future is unknown but a trendline that makes the prediction of AI taking over in a couple of years is not an unrealistic prediction simply because of past progress. That is the most probably conclusion given the information we have.
Discarding that as just "hype" just means you're not being very rational or logical which is normal given we're on HN.
OAI can play the empire / Death Star angle and get away with it. They've actually got a scary battlestation and anyone interested in capitalizing on the galaxy is going to be drawn to the most powerful laser system in the fleet.
I don't have a problem with the non-engineering arguments, but I don't buy that one is more ethical than the other. All of these people are total maniacs. Not just Sam and Elon.
Just pure propaganda. In my opinion, not so much different than the opinions of the current US whitehouse regime.
Interesting, so there are a lot of people still eager to invest in valuations of well greater than a-quarter-trillion, but OpenAI's latest raise has sucked up all the oxygen for enthusiasm of that valuation going even higher.
Which could be a "dumb money" move ("competitor number lower, already-big-number is scary") or a "smart money" move ("Anthropic is gaining position-wise, and currently is lower valued, let's bet on the one we think is better positioned") or some mix of both.
OpenAI just raised a shit-ton so clearly there is plenty of money out there who don't think there's a bubble or even a blown opportunity there. But the wider community doesn't think they have the competition in the bag, while still being willing to invest in big-AI-cos at absolutely enormous valuations.
If local hardware/models get good enough to take 80%-90% of what people use subscriptions for today... hoo boy. Big-AI is a bet I wouldn't be confident placing billions on. Unless your horizon is more "wait for IPO or next raise or positive news, then get out ASAP" than "hold for 5+ years."
The thing is, if you’re using AI responsibly today you’re already breaking down tasks to such a granular level that you don’t need the power of Opus. You can save that for deeper research tasks.
I've been hearing that vibe coding is the future for at least the past year but somehow it always requires the newest model, and all the "old" models produce trash results. Why is that?
What about the bugs that model makes? Well the next model will fix them of course!
Just keep giving us money and we’ll fix your bugs for you, no worries!
The part I am working on is to have better tools and data to search over. Curated for my needs. Similar to the Karpathy post yesterday about his wiki. I am trying something similar and even qwen 3.5 is totally fine for most of what I do.
Disclaimer: I bought memory before the crisis started. Not sure if I would build my PC as is now..
> It's largely SoftBank, Oracle, Microsoft and Nvidia, all of whom don't have big piggybanks full of hundreds of billions.
Actually SoftBank, Microsoft and Nvidia literally have free cash sitting there.
NVIDIA for example had over $60B in audited, reported free cash flow in 2025[1]
> loans from Nvidia (at high interest rates),
Is this just something you are making up?
"NVIDIA intends to invest up to $100 billion in OpenAI as the new NVIDIA systems are deployed. The first phase is targeted to come online in the second half of 2026 using the NVIDIA Vera Rubin platform."[2]
The closes there is to waht you are saying is reporting that NVIDIA has discussed guaranteeing some of the loans OpenAI is taking to build data centers:
"Nvidia is discussing guaranteeing some of the loans that OpenAI is planning to take out in order to build its own data centers, The Wall Street Journal reported, citing people familiar with the matter."[3]
This of course is the opposite of NVIDIA loaning OpenAI money - if they did this they would be liable for OpenAI's debts.
[1] https://nvidianews.nvidia.com/news/nvidia-announces-financia...
[2] https://nvidianews.nvidia.com/news/openai-and-nvidia-announc...
In being a guarantor, Nvidia isn't directly giving the money now, but it is promising to be liable for the loan if OpenAI defaults. That's a risk they have to budget for.
But in addition to being a guarantor, they're also loaning out chips:
"OpenAI plans to pay for Nvidia’s graphics processing units (GPUs) through lease arrangements, rather than upfront purchases." "By leasing the processors, OpenAI can spread its costs out over the useful life of the GPUs, which could be up to five years a person said, leaving Nvidia to bear more of the risk."
Nvidia is leasing them the GPUs, which is basically a loan.
"In addition to offering a cost-efficient way for OpenAI to access chips, Nvidia’s lease option and long-term commitment can help the company land better terms from banks when it comes to raising debt, a person said. "
"As a non-investment-grade startup that lacks positive cash flow, financing remains costly. OpenAI executives have called equity the most expensive way to fund data centers, and said that the company is preparing to take on debt to cover the remainder of the expansion."
"“Folks like Oracle are putting their balance sheets to work to create these incredible data centers you see behind us,” Friar said. “In Nvidia’s case, they’re putting together some equity to get it jumpstarted, but importantly, they will get paid for all those chips as those chips get deployed.”"
Nvidia leases (loans) them GPUs with a promise to pay for them later. Getting this lease (loan) from Nvidia helps them secure more debt.
"OpenAI’s path to a $500 billion private market valuation has been enabled by hefty investments from Microsoft and others that allow the company to burn billions of dollars in cash while building its AI models that power services including ChatGPT."
"Jamie Zakalik, an analyst at Neuberger Berman, said the Nvidia deal is the latest example of OpenAI raising money that it pours right back into the company providing the capital. Investors are concerned about the “circular nature of this deal goosing up everyone’s earnings and everyone’s numbers,” said Zakalik. “But it’s not actually creating anything.”"
They get a loan of chips, use it to get a loan of money from someone else, and spend that money on the company that loaned them the chips. It's a Ponzi scheme.
(https://www.cnbc.com/2025/09/24/nvidia-openai-investment-in-...)
Vendor financing is very standard across multiple industries. It's not a loan in the sense you originally stated because it's physical assets, not financing.
The circular nature of the deals is a valid concern but different to what you raised.
It's also a much smaller concern now with Anthropic hitting $30B ARR from non circular sources than it was in September 2025 when your article was written.
The Chinese models are catching up in quality while being a fraction of the price. The market will speak, how many devices that contributed to this thread were made in the USA?
Sure you can argue the Chinese companies are heavily subsidized, but no major LLM lab is remotely close to making a profit this decade.
As a small business owner whose team is entirely in Google Workspace (Drive, Gmail, Chat -- so inbuilt RAG right there), I wonder if Gemini will be the darkhorse. As a user Gemini's a distinct third in "AI smarts", but most business owners aren't power users who are gonna setup Codex or Code to slurp up their work emails and internal docs/SOPs.
The article feels a touch clickbait-y since people love a good fight between the top players and OAI's lost a buncha public goodwill over the past year.
Out of curiosity, have you compared the relative effectiveness of ChatGPT and Claude vs Copilot? Given your existing enterprise contract, does copilot have a monopoly on your AI usage due to its superior compliance?
Copilot has a far easier path to monopoly because it can be pushed down existing Microsoft contracts, MS has put in the work for international jurisdictions in terms of data compliance in existing products and thus can extend upon that with Copilot, and they have a foothold in a good many places. One thing that is interesting with Copilot is that if you set it to Work mode, it can treat your organisational SharePoint sites and OneDrive locations as sources, but do so in a manner that respects what you as a user has access to.
Then shortly after Codex was released which made that more accessible and instantly preferred that compared to Code since much more generous allotments for $20 plan. Claude constantly kept hitting. And Code actually had a more robust UI and was more accurate when doing the same project side by side vs Claude Code.
But imagine many haven't tried Codex recently since all we hear about is Claude Code. So while they may have momentum, at least for me with no stake in the game, Codex finding far better, but I suppose that could all change again on a whim.
> imagine many haven't tried Codex recently since all we hear about is Claude Code
My theory is Codex allotments are higher because the demand isn't there (yet). Claude users hit their limits because there is so much more usage.
> large gap between OpenAI’s $852-billion valuation and Anthropic’s $380 billion
IIRC Anthropic's revenue is either roughly at parity with or larger than OpenAI's, and Anthropic is growing faster[1]. All indicators are that Anthropic should be worth more than OpenAI. Given that, one could reasonably expect the relative valuations to change a great deal. In any case, it's not clear why OpenAI would command such a price premium over Anthropic.
1 - OpenAI says they are doing $2B/mo run rate https://openai.com/index/accelerating-the-next-phase-ai/
Anthropic's run rate increased from $12B to $19B in the period between February 12 and the end of the month. If the implied growth rates held through March, Anthropic may well be larger than OpenAI now.
I’ve been primarily on Claude for the last 6 months or so, but have been hitting rate limits. I switched work to Codex seamlessly, just like I could switch to any other provider seamlessly
GPT has negligible moat because they gave up on all their integrations. Claude code is starting to develop one as people start to build things that require Claude Code specifically, not just any LLM.
I hate to be a "source?" guy, but I'm curious if you have any examples of this. Skills and MCP are really the only extensions on CC itself I'm aware of, and these are both supported in Codex.
Things like Dispatch / remote sessions is something CC has that Codex does not, but these features are quite easy to replicate (and I expect Codex to do so in short order).
Having written several orchestrators I’ll say that the code to invoke the tool is pretty equivalent but it’s the details that matter. Exact CLI flags and json fields.
What’s interesting is that they’re both still losing money on their models and are essentially giving away compute for free, although lossy.
They’ve bought up computing power and are now renting it back to the rest of us, with a decent HMI, while subsidising us to use it.
Allbirds, the shoe brand, went public at $4bn in 2021 and sold its assets last week for $39 million.
> Neil Saunders, the managing director of the consultancy and market analysis firm GlobalData said: “Allbirds has gone from being a high flyer to a dead parrot.” He said its early success “was driven by Silicon Valley hype, more than deep popularity with consumers in the American hinterland”.
[0] https://www.theguardian.com/business/2026/apr/02/eco-shoe-br...
But I’m not necessarily oozing about it online — vocal minority and all.
Maybe a better metric: Across work + personal I have 1,000+ sessions in the last 30 days, longest session was 3d 20h
ChatGPT's chat quality has recently dropped hard. While Claude is pricier, it actually takes the effort to think through complex tasks.
All the while, Chinese models are providing cheaper alternatives.
“We literally couldn’t find anyone in our pool of hundreds of institutional investors to take these shares“
This doesn’t bode well for an IPO. The market is smelling a stinker.
Get your popcorn ready for a mad scramble to salvage investments if indeed the shark has been jumped.
I was watching a recent Jensen Huang Q&A with analysts and it was essentially “just trust me bro”. They’re all interconnected - once there’s a correction for one player, all get affected.
Can’t wait to finally get this over with so we can finally move on.
The gap between hype and reality needs to be corrected.
I'm inclined to think there isn't much of an association becauss investors don't seem very concerned with morality, but I know ~dozen developers that either switched to, or started using Claude in the past month or so, while not knowing anyone that uses Codex.
They want to see the CEO communicate a path to profitability. Anthropic has - purely by focusing.
OAI in contrast is all over the place and they haven’t shown they’ve learned.
Zuckerberg got punished for his metaverse nonsense and investors were correct to be skeptical and reflect that in the stock price. Altman thinks he’s a god and the rules don’t apply to him. More fool him.
The Sam curse. Took down Bankman-Fried before him...
Did they? It's been a little less than 5 years since Zuckerburg announced the all-in plan on the metaverse. In that 5 year period, Meta's stock price has gone up by 84%... which is middle of the pack for MAGMA, less than Apple (91%) and Google (157%), but above Amazon (24%) and Microsoft (47%). It's also comfortably above the S&P 500 (59%).
I think it's hard to grasp just how much money he poured into this folly. $80 Billion. For an idea that any random person on the street could have torn apart. He read Ready Player 1 and decided that was what the future should be. Then he tried to make it. He ruined the Oculus brand and stole all the oxygen from other VR development just to make a lesser copy of our own world, but one where he could be admin.
Seattle just opened a new transit line, spanning from downtown Seattle to Bellevue. It's 33 miles long and cost $3.7 billion. It was already carrying 2 million people per year [0] even before the entire line was finished and on the opening day after completion it reached 200,000 riders.
Further from home, the entirety of the Artemis II program cost $93 billion [1] and lists an estimated $4 billion per launch.
One last example - the panama canal would cost an estimated $50 - $75 billion if you built it today. [2] The panama canal reshaped trade routes and the global economy.
Where is Meta's moon landing? Where is their impact? Zuckerberg spent enough money to build a new transit system for an entire city. Enough money to land astronauts on the moon. Enough to connect oceans together. He poured this money down a hole chasing his own vanity and a vision of the future that no one wanted.
How, after all that, did he get punished? He's still CEO. "Meta" is still overvalued. They're still regarded as a serious tech company.
[0] https://en.wikipedia.org/wiki/2_Line_(Sound_Transit)
[1] https://www.msn.com/en-in/news/world/artemis-2-cost-explaine...
[2] https://www.mikegravel.org/how-much-would-the-panama-canal-c...