Why Does Openai Need a Federal Backstop If It Is Going to Be Profitable

Either it is going to start generating astonishing levels of profit soon like they claim and they wouldn't need it or they are a money furnace and this is the only thing that will save this from collapse

Early 2000 and 2008 put together.

Because openai was given a federal backstop, it has a guaranteed customer as nation scale, and will be able to leverage that into massive profit in cost-plus service delivery?

Because it has gilt, it can go into markets and source money at gilt equivalent rates not risk venture rates?

Frankly, this just confirms to me it's a bubble close to popping. It's not mcdonnel Douglas being told "price no obstacle" doing space work in the 60s, it's the shipmaker for the south Sea bubble slave trade being told free teak and the first 20 ships are purchased.

Well it’s gonna cure cancer and every other issue we have so obviously taxpayers should support it!!

They’ve already received almost $60 BILLION dollars.

That’s more investment than most companies ever see as revenue throughout their entire existence.

FFS, If one cannot make an established , profitable company with $60 Billion of free cash, they are an incompetent at best.

Fuck OpenAI. Fuck OpenAI. Fuck OpenAI.

Spoiler: it's never going to be profitable. It's pre-loading the government bailout it's expecting.

Why was this flagged?

This reminds me of the “too big to fail” arguments from the financial crisis.

We will prop up companies to try to contain some kind of financial contagion (pay no mind that it is also socialist corporate welfare)