combilabs

Several weeks ago, we published a more substantive article using this very same analogy:

https://www.linkedin.com/pulse/announcing-universal-mathemat...

The article describes a unifying mathematical framework for representing neural network architectures. It can be used to describe existing ones, like transformers and convolution, but can also be used to generate entirely novel ones. As part of our research, we generated several thousand new architectures, some of which show remarkable properties. The corresponding research paper is up on arXiv:

https://arxiv.org/abs/2605.04325

Can you point to a lot of posts lauding the Chinese government based on the release of Chinese open models? Because that would be the equivalent to contrast with the OP.

>They'd sell the contracts for some of that compute to the fifty other companies desperate for it.

And if OpenAI were an isolated case, that might be all there is to it. But the whole point of the article is that it isn't isolated. So if OpenAI can't raise the money to execute on those contracts, it's unlikely that another AI company will have the spare cash to buy them at anything like full value. Remember, everyone in that market is riding the same second derivative. OpenAI is just a bellwether.

The article addresses the mechanism in the "How It Breaks" section. The problem lies in the interconnected contracts, not debt financing. If OpenAI cannot get new financing, it will have to cut costs, and one of its big costs are forward compute commitments it will have to break. Those commitments are a significant share of revenue for other companies like CoreWeave and Oracle, so if OpenAI has to cut significantly, it will be crippling to those companies. They in turn have commitments to suppliers like Nvidia, and on down the line the losses propagate, with corresponding drops in equity values in the sector which are extremely growth sensitive. Just as the same dollar showed up in the correlated revenue on the way up, so will the same dollar show up in the correlated losses on the way down. That's the balloon effect here.

I expect you would find that companies that historically invest more in R&D or cap-ex tend to hire more in the following two years, regardless of the form of that investment. It doesn't look like the paper made any effort to control for different forms of R&D or cap-ex.

I actually see this as an indicator that they still feel they can comfortably raise in the private market. If they tried to rush an IPO into an indifferent public market it would look worse, in my opinion. I'm not saying they're in great shape--they may be in terrible shape for all I know. But I think rushing the IPO would send a worse message than holding off.