# OpenAI: 17 Times Worse Than the Dot-Com Crash. And Nobody Is Ready.

> OpenAI signs $1T in circular deals with Nvidia, Oracle, and AMD while the BoE, IMF, and Dimon sound the bubble alarm. A boom 17x bigger than dot-com.

- Canonical: https://siliconvalleyconfidential.com/en/dossier/openai-17-times-worse-than-the-dot-com-crash-and-nobody-is-ready/
- Site: Silicon Valley Confidential (https://siliconvalleyconfidential.com) — weekly executive intelligence on Silicon Valley and global tech
- Author: Jose Luis Cases (https://es.linkedin.com/in/jose-luis-cases-lozano)
- Language: en
- Published: 2025-10-11 (original LinkedIn edition: https://www.linkedin.com/pulse/openai-17-veces-peor-que-el-crash-puntocom-y-nadie-est%C3%A1-cases-l9vif/)

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THE BOMBSHELL OF THE WEEK
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### OpenAI announces $1 TRILLION in circular deals with Nvidia, Oracle, and AMD

On October 10, Wolf Street revealed that OpenAI has announced deals worth 1 TRILLION dollars, headlined by Nvidia ($500B), Oracle ($300B), and AMD ($270B).

This looks a lot like a chain of IOUs from where I'm standing — over there they call it "hocus-pocus money."

The circular mechanics of hocus-pocus money:

*   OpenAI does NOT have $1 trillion — it's burning cash hand over fist
*   OpenAI tries to secure investment commitments from the SAME companies it would buy equipment from
*   Each announcement makes those companies' stocks spike massively
*   The money circulates among the same companies in an infinite loop

What are the numbers behind this madness?

*   OpenAI's valuation: $500 billion (based on a secondary share offering)
*   OpenAI's revenue: Massive and growing losses
*   The data centers OpenAI wants to build would require 10 GW
*   For context: The largest nuclear plant in the US (Plant Vogtle) generates only 4.5 GW
*   ALL US nuclear plants combined add up to 97 GW

Why is this my bombshell of the week?

1.  Perfect timing: Announced just as the Bank of England/IMF warn about an AI bubble (Oct 9)
2.  Unprecedented magnitude: $1T exceeds the GDP of most countries
3.  A signal of desperation: OpenAI urgently needs capital but can't raise it the traditional way
4.  Domino effect: Each announcement moves billions in market valuation

There have been alarmed voices clutching their heads this week — here are a few:

*   Jamie Dimon (JPMorgan)
*   Bank of England (October 9)
*   IMF Managing Director Kristalina Georgieva (October 9)
*   Goldman Sachs analysts
*   Wolf Richter: "AI is huge. But so is the mania of hype, hocus-pocus deals, and piles of real money"

Is this different from the dot-com bubble? NO. The same "this time it's different" argument that was heard in 1999-2000. The difference: this time the boom is 17 TIMES bigger, according to an analysis by Julien Garran (MacroStrategy Partnership).

How has the market taken it?

*   Edgy markets: The Nasdaq fell 3.56% on October 10
*   NVIDIA made an "outside reversal" from an all-time high (bearish signal)
*   Private credit jumping on the train with dubious collateral (used GPUs)
*   Energy bottleneck: There isn't enough power on the planet to execute these plans

* * *

### POWER MOVES

### 1\. Cerebras cancels its IPO after raising $1.1B.

The move: AI chipmaker Cerebras Systems withdrew its IPO filing just days after announcing a $1.1 billion Series G round.

Critical timeline:

*   September 30: Announces $1.1B Series G
*   October 3: Withdraws IPO filing
*   October 6: CEO explains the reasons in The Register

The truth behind it: The US national security review of G42's (Abu Dhabi) $335M investment was more serious than publicly admitted. CEO Andrew Feldman revealed on October 6 that the regulatory hurdles were currently untenable.

Has there been an ecosystem impact this week?

Other semiconductor startups with foreign capital have recalibrated their strategies. Conversations at Tech Week SF revealed quiet panic among founders with Middle East/Asia investors.

### MONEY TALKS

### 1\. Bay Area AI startups dominate Q3 2025

The numbers confirmed this week:

*   $30B raised by AI startups in the Bay Area in Q3
*   30% of the global total of $97B in VC during Q3
*   38% year-over-year growth in global VC investment

The Bay Area's 6 Q3 mega-deals:

1.  Anthropic - $13B (San Francisco)
2.  Databricks - multiple deals
3.  Figure (humanoid robots) - $1B+
4.  Rigetti Computing (quantum) - undisclosed
5.  Cerebras - $1.1B
6.  +1 undisclosed deal

The geographic concentration is extreme:

*   67% of global AI investment went to the Bay Area
*   This is NOT diversification, it's hyper-concentration
*   If you're not in SF/Bay Area, your funding odds drop 70%

What this means for Tech Week: The VCs at Tech Week this week have their checkbooks open, but ONLY for AI. Everything else is on hold.

* * *

### NUMBERS vs REALITY

### The AI Bubble: Warnings from the Bank of England and the IMF

The Bank of England and the IMF issued warnings that tech stock prices driven by AI optimism could burst, with valuations comparable to the 2000 dot-com peak. The data is stark:

*   Tech stock valuations at levels not seen since 2000
*   Price/earnings multiples disconnected from fundamentals
*   Extreme concentration: Top 7 tech stocks = 30% of the S&P 500

The million-dollar question: How long can the AI boom keep up this pace?

### Oklo nuclear stock jumps 500%

Oklo Inc. (NYSE: OKLO), an advanced nuclear energy startup, saw its stock rise more than 500% in 2025, hitting an intraday high of $146.

The AI context: The AI boom needs massive ENERGY for data centers. Nuclear is the critical infrastructure bet.

Revolution or speculative bubble? It's the same debate as with AI stocks. The need is real, but do the valuations reflect reality or hype?

MY TAKE
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To me, OpenAI's money is a shell game — but the infrastructure it's building is real. There may be a bubble, but the foundations will survive.

The bubble is going to burst. That's mathematically inevitable when you have a $500B valuation with massive and growing losses. But the collapse won't wipe out the infrastructure. The data centers will remain, the chips will remain, the compute capacity will remain. Just like the fiber optics remained after the dot-com era.

What worries me is the timing. Bank of England + IMF + Jamie Dimon all warning in the same week. The Nasdaq dropping 3.56% on Friday. NVIDIA making an "outside reversal" from an all-time high. Not good.

For me, the bottleneck is energy, not capital. OpenAI can raise (or pretend to raise) $1 trillion, but it can't build nuclear plants in 18 months.

If you hold tech stocks, this week is critical. Q3 earnings (Google on the 22nd, Microsoft on the 23rd, Meta on the 24th, Amazon on the 26th) will reveal whether AI CapEx keeps climbing or starts to moderate. If it drops, the market will read it as even the giants getting scared...

Nothing more to say — I'm enjoying a long weekend with the family and got up early to write the newsletter. I hope you like it :)

And my "one more thing" :)

If you run a company: Don't invest in expensive AI infrastructure now. Wait 6-12 months. When it bursts, GPU and compute prices are going to collapse.

Thanks for reading. If you have ideas for improvement, leave them in the comments. And if you survive the crash, see you on the other side