Is the AI Bubble's Lehman Moment Approaching? Zitron Predicts OpenAI Collapse Will Eventually Hit the Stock Market

Artificial intelligence (AI) skeptic and author of 'The Hater's Guide to the AI Bubble,' Ed Zitron, believes OpenAI is steadily moving toward its own 'Lehman moment.'

Despite strong earnings reported by semiconductor manufacturing leader TSMC (TSM-US)(2330-TW), market confidence in AI-related stocks did not significantly improve on Thursday (16th).

Growing concerns have emerged about whether massive investments in AI will eventually yield proportional returns. Zitron's latest Substack article, approximately 15,000 words long, has further fueled market skepticism. The founder of a tech PR firm argues that the question is not whether OpenAI will fail, but when.

He writes: 'OpenAI's failure will become the AI bubble's 'Lehman Brothers moment,' symbolizing the end of one era and the beginning of another, and will wake up those intoxicated by AI hype.'

Zitron has long criticized the AI industry, claiming there is an almost 'cult-like' AI frenzy in the market, with OpenAI at the core of sustaining this bubble.

Since researching large language models (LLMs) from early 2023, he has believed generative AI is merely the latest gold rush in the tech industry. Two years ago, he predicted OpenAI's video generation model Sora would struggle to commercialize, and Sora was indeed discontinued in March this year.

In his latest article, Zitron fiercely criticizes OpenAI's business model and its plan to spend over $852 billion by the end of 2030. He notes that OpenAI's computing expenses alone this year will exceed $50 billion—more than 50% of global computing spending.

Zitron points out that OpenAI and Anthropic have collectively raised around $300 billion over the past few years. The massive AI infrastructure costs borne primarily by major cloud providers have created a false impression that more companies will follow OpenAI in consuming vast computing resources.

He specifically highlights Oracle (ORCL-US) as being at high risk: if OpenAI collapses, Oracle could be left with 'billions of dollars in unrecoverable capital expenditures, massive debt, and leasing commitments.'

Zitron believes OpenAI's collapse will only occur after AI data center debt and venture capital funding are nearly exhausted, due to its enormous capital demands.

Based on audited financial reports from OpenAI for 2024 and 2025 that he obtained and analyzed, OpenAI will need at least three more funding rounds over the next decade. He predicts OpenAI will ultimately fail due to subscription losses, weak advertising revenue, and excessively high service costs.

When that happens, corporate demand for computing resources will decline, the free version of ChatGPT will disappear, investors will lose confidence in all AI startups, and financing for AI-related data centers could stall.

Zitron also views Anthropic as unstable, criticizing the company for continuously burning cash to train models while launching too many versions of Claude without a clear strategic direction.

He predicts that if OpenAI collapses, it will have a 'dramatic and heavy' impact on the overall stock market, adding, 'The scale of this scenario makes me wish I were wrong.'

However, not everyone in the market shares this pessimism. Howard Marks, co-founder and co-chairman of Oaktree Capital Management, stated in a podcast aired Wednesday that he has shifted from believing AI might form a bubble to becoming more optimistic about AI's technological potential.

On the 'My First Million' program, he explained his changed view by noting that AI can now analyze its own strengths and weaknesses, use humor, tailor content to user backgrounds, and adjust responses based on user understanding—'This is truly remarkable.'

Marks emphasizes that AI possesses multiple 'unprecedented' capabilities. Looking at past technological revolutions like railroads and the internet, he says no technology has ever had such a high degree of autonomy as AI.