Power Cut
We recorded 21 claims from this post. 4 were checked against evidence. 17 can’t be checked. 25 more are held. Read the post at its source.
Claims from this post (21)
In the order they appear in the post. Each quotation is the speaker’s words in this post. A label such as “Supported” or “Can’t be checked” is the claim’s current assessment; its page has the evidence and the reasons.
Assessment: Can’t be checkedSaid
“These numbers heavily suggest that Microsoft — the biggest purchaser of NVIDIA's GPUs and, according to TD Cowen, "the most active [data center] lessee of capacity in 2023 and 1H24" — does not believe there is future growth in generative AI, nor does it have faith in (nor does it want responsibility for) the future of OpenAI.”
What we tested: Microsoft's data center cuts strongly suggest it does not believe in future generative AI growth or have faith in OpenAI's future.
Assessment: Can’t be checkedSaid
“I believe the reason Microsoft is cutting back is that it does not have the appetite to provide further data center expansion for OpenAI, and it’s having doubts about the future of generative AI as a whole.”
What we tested: The author believes Microsoft is cutting back because it does not have the appetite to provide further data center expansion for OpenAI and is having doubts about the future of generative AI as a whole.
Assessment: Can’t be checkedSaid
“These moves also suggest that Microsoft is walking away from building and training further large frontier models, and from supporting doing so for others.”
What we tested: Microsoft's moves suggest it is walking away from building and training further large frontier models and supporting others doing so.
Assessment: Can’t be checkedSaid
“And, again, the total figure is likely far higher than a gigawatt.”
What we tested: The total data center capacity Microsoft walked away from is likely far higher than a gigawatt.
Assessment: Can’t be checkedSaid
“In the event that Microsoft believed there was meaningful growth in generative AI, it wouldn't be canceling anything, or at the very least wouldn't be canceling so much.”
What we tested: If Microsoft believed in meaningful generative AI growth, it would not be canceling data center capacity, or not so much.
Assessment: Can’t be checkedSaid
“Canceling cities-worth of capacity at a time when artificial intelligence is supposedly revolutionizing everything suggests that artificial intelligence isn't really revolutionizing anything.”
What we tested: Microsoft's capacity cancellations suggest AI is not really revolutionizing anything.
Assessment: Can’t be checkedSaid
“Given that $3bn is equivalent to OpenAI’s entire revenue from selling premium access to ChatGPT in 2024 — which included some major deals with the likes of PriceWaterhouseCoopers — I’m inclined to believe the latter.”
What we tested: SoftBank's $3 billion-a-year purchase of OpenAI technology is likely a backdoor subsidy rather than a reflection of value.
Assessment: Can’t be checkedSaid
“This, combined with Microsoft's data center pullback, heavily suggests that Microsoft is no longer interested in being OpenAI's infrastructure partner long-term”
What we tested: Microsoft is likely no longer interested in being OpenAI's long-term infrastructure partner.
Assessment: Can’t be checkedSaid
“At worst, this situation could suggest that Microsoft is actively dumping OpenAI, and is having questions about the fundamentals of the generative AI industry.”
What we tested: At worst, Microsoft could be actively dumping OpenAI and questioning generative AI's fundamentals.
Assessment: Can’t be checkedSaid
“Nevertheless, I have real concerns about whether OpenAI is even capable of expanding further, starting with a fairly obvious one: its only source of money, SoftBank.”
What we tested: OpenAI may not be capable of expanding further, given its only money source is SoftBank.
Assessment: UnresolvedSaid
“Worse still, thanks to this agreement, OpenAI’s future — both in its ability to expand its infrastructure (which appears to be entirely contingent on the construction of Stargate) and its ability to raise funding — is entirely dependent on SoftBank, which in turn must borrow money to fund it.”
What we tested: OpenAI's infrastructure expansion and fundraising are entirely dependent on SoftBank, which must borrow to fund it.
Assessment: UnresolvedSaid
“OpenAI has no path to profitability, guaranteeing it will need more cash, and right now — at the time when it needs the most it’s ever needed — SoftBank, the only company willing to provide it, has proven that it will have to go to great lengths to do so.”
What we tested: OpenAI has no path to profitability, which guarantees it will need more cash.
Assessment: Can’t be checkedSaid
“OpenAI burned $5 billion in 2024, a number it’ll likely double in 2025 (remember, the Information reported that OpenAI was projected to spend $13 billion on compute alone with Microsoft in 2025), and it has no path to profitability.”
What we tested: OpenAI will likely double its $5 billion 2024 cash burn in 2025.
Assessment: Can’t be checkedSaid
“Microsoft walking away from over a Gigawatt of data center plans — equivalent to as much as 14% of its current data center capacity — is a direct sign that it does not believe the growth is there in generative AI”
What we tested: Microsoft's walking away from over a gigawatt of plans directly signals it doesn't believe in generative AI growth and may have overbuilt.
Assessment: Can’t be checkedSaid
“Microsoft making such a material pullback on data center expansion suggests that the growth in generative AI products, both those run on Microsoft’s servers and those sold as part of Microsoft’s products, do not have the revolutionary growth-trajectory that both CFO Amy Hood and CEO Satya Nadella have been claiming”
What we tested: Microsoft's material pullback on data center expansion suggests that generative AI products, both those run on Microsoft's servers and those sold in Microsoft's products, lack the revolutionary growth trajectory Amy Hood and Satya Nadella claim, and it calls into question generative AI's viability as a growth vehicle for any hyperscaler.
Assessment: Can’t be checkedSaid
“It is time for investors and the general public to begin demanding tangible and direct numbers on the revenue and profits related to generative AI, as it is becoming increasingly obvious that the revenues are small and the profits are non-existent.”
What we tested: Investors and the public should demand direct generative AI revenue and profit figures.
Assessment: UnresolvedSaid
“It is time for investors and the general public to begin demanding tangible and direct numbers on the revenue and profits related to generative AI, as it is becoming increasingly obvious that the revenues are small and the profits are non-existent.”
What we tested: Generative AI revenues are small and profits are non-existent.
Assessment: UnresolvedSaid
“SoftBank has committed to over $40 billion of costs that it cannot currently afford, taking on as much as $24 billion in debt in the next year to help sustain one more funding round and the construction of data centers for OpenAI, a company that loses money on literally every single customer.”
What we tested: SoftBank has committed to over $40 billion of costs it cannot currently afford, taking on as much as $24 billion in debt in the next year to help sustain another OpenAI funding round and the construction of data centers for OpenAI, which loses money on every customer.
Assessment: Can’t be checkedSaid
“OpenAI burned $5 billion in 2024, will likely burn $11 billion in 2025, and will continue burning money in perpetuity”
What we tested: OpenAI will likely burn $11 billion in 2025.
Assessment: Can’t be checkedSaid
“Worse still, there doesn’t appear to be meaningful revenue.”
What we tested: Generative AI does not appear to generate meaningful revenue.
Assessment: Can’t be checkedSaid
“If I’m right, tech’s only growth story is dead.”
What we tested: If the author's analysis is right, generative AI, tech's only growth story, is dead.
Held from this post (25)
These records did not pass every check, so nothing about them is published. Held is not a finding.
- The two reviews reached different assessments. Our reading, not assessed: Hardware upgrades could account for some of Microsoft's stated $80 billion 2025 AI capital expenditure but would be nowhere near that figure.
- The record does not meet the current rules. Our reading, not assessed: Microsoft appears to have built too much capacity relative to actual consumer demand.
- The two reviews read the claim differently
- The record does not meet the current rules. Our reading, not assessed: Microsoft is effectively cutting its data center expansion by over a gigawatt of capacity, if not more, and these cuts are impossible to reconcile with the expectation that generative AI will be a massive, transformative technological phenomenon.
- The two reviews read the claim differently
- The two reviews reached different assessments. Our reading, not assessed: OpenAI is essentially the only generative AI company with real market share and significant revenue.
- The record does not meet the current rules. Our reading, not assessed: Microsoft appears to have given up on further data center expansion, at least at its once-promised pace.
- The record does not meet the current rules. Our reading, not assessed: Microsoft reducing capacity strongly suggests generative AI growth is not there.
- The record does not meet the current rules. Our reading, not assessed: Microsoft will continue selling unprofitable generative AI software because its current capacity exceeds the limited demand.
- The two reviews read the claim differently
- The two reviews read the claim differently
- The record does not meet the current rules. Our reading, not assessed: If the author is correct, Microsoft is walking away not just from expanding its current data center operations but from generative AI writ large.
- The two reviews read the claim differently
- The record does not meet the current rules. Our reading, not assessed: OpenAI, which must raise a record $40 billion to meet its obligations, is certain to need more money within a year.
- The two reviews read the claim differently
- The two reviews read the claim differently
- The two reviews read the claim differently
- The record does not meet the current rules. Our reading, not assessed: Microsoft's $13 billion AI annual recurring revenue is mediocre and likely won't improve.
- The record does not meet the current rules. Our reading, not assessed: GPT-4.5 appears to be even more ruinously expensive than OpenAI's previous model while providing modest-at-best improvements and performing worse than competing models on several benchmarks.
- The two reviews reached different assessments. Our reading, not assessed: The author does not see how OpenAI survives, and SoftBank's involvement adds to his concern.
- The two reviews read the claim differently
- The record does not meet the current rules. Our reading, not assessed: To survive, OpenAI must continue raising more money than any startup has ever raised before, and it can only do so from SoftBank, which in turn must take on debt.
- The criteria are ambiguous. Our reading, not assessed: Data center expansion is absolutely necessary for generative AI to continue evolving and expanding.
- The two reviews reached different assessments. Our reading, not assessed: Generative AI does not have meaningful mass-market use cases, and there does not appear to be meaningful consumer adoption outside ChatGPT, mostly because almost all AI coverage ends up marketing OpenAI.
- The record does not meet the current rules. Our reading, not assessed: Stargate is unlikely to run its Abilene data center on diesel generators as a primary power source.