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OpenAI shows too much money can be a real thing
The record-setting US$40 billion funding round is indicative of just how much cash is flooding into AI – leading start-ups to chase all the wrong priorities.
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The leading AI companies are extraordinarily unprofitable, even by historical “growth at all costs” standards.
PHOTO: REUTERS
Gautam Mukunda
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On March 31, OpenAI announced US$40 billion (S$53.7 billion) in new financing, the largest funding round in history, and one that nearly doubled the artificial intelligence company’s valuation to US$300 billion. While no other start-up can match those eye-watering numbers, they probably shouldn’t be a surprise given just how much capital is flooding into the technology: AI companies raised a record US$110 billion in venture capital funding in 2024.
That kind of money might seem like a boon for AI innovation. But it may become a burden instead. First, by depriving these firms of invaluable market signals. Second, by driving them to appeal to investors instead of customers.
