Despite the rise of competitors such as DeepSeek, OpenAI has not lost any traffic, unexpectedly growing faster than ever and leaving all competitors behind. The question is why OpenAI nevertheless needs $40 billion. We discuss this and much more in the new weekly podcast we are launching this weekend: The NFA Podcast, with co-presenter Dr. Nisheta Sachdev. The first two episodes have been online since this morning.
Also in this newsletter, we look at the final breakthrough of Palantir and the mysterious company SSI, which does not appear to have a product out, yet is valued at $20 billion.
New weekly podcast: NFA
In episode 1(viewable on YouTube here or on Spotify here), Nisheta and I introduce ourselves, talk about how we got into the tech and crypto world, and discuss the latest trends in web3 and tech, with a special focus on AI. According to Nisheta, the link between AI and crypto represents the definitive breakthrough of blockchain in the consumer market.
In episode 2(viewable on YouTube here or on Spotify here), we dive deeper into specific crypto projects such as PAIN, the token that last week raised $40 million in an instant and returned money to investors. We also discuss Palantir's extraordinary quarterly results and show footage of CEO Alex Karp, who in a jolly mood declares war on opponents of America and the West....
The name NFA was coined by Nisheta and stands for "Nish, Frackers & Anon" or "Anyone Else," because we hope to have interesting guests, but it also stands for "Not Financial Advice": we absolutely do not want to give financial advice.
Weekly, Nish and I discuss the most notable developments in crypto and tech, without trying to be pedantic or give investment advice. We share our thoughts, opinions and things we find interesting, such as interesting tokens and stocks that have come on our radar.
Whether you are a seasoned tech and crypto expert or an enthusiastic beginner, our goal with the NFA Podcast is to create a place to explore the market together and share experiences. All suggestions and feedback are welcome.
Who is Dr. Nisheta Sachdev?
Dr. Nisheta Sachdev, also known as "The Crypto Dentist," is a prominent figure in the blockchain world. Her inclusion in the "40 under 40" list underscored her breakthrough in this fast-changing world, where Nisheta stands out for her lucid analyses.
Nisheta came into contact with crypto in 2018 and worked full-time in the sector from 2020, when she and her sister Nikita started the soon-to-be leading crypto marketing company Luna PR in Dubai. Within the blockchain sector, Nisheta became a passionate advocate for technologies such as cryptocurrencies, NFTs, the metaverse and AI. Nish has a unique ability to articulate complex concepts simply, making her a popular and respected speaker at international conferences.
Despite her keen interest in the crypto and technology sectors, Nish recently answered a higher calling and resumed her studies in medicine, specializing in reconstructive surgery of patients who have lost parts of their jaw and face, mostly due to forms of oral cancer. For those interested in learning more about Nisheta, I recommend this recent interview with her on YouTube.
ChatGPT resurrected from never being gone
After a period of stagnation, ChatGPT has returned to strong growth, leaving competitors such as Bing, Gemini, Claude and Perplexity far behind. They are "Boom Times For ChatGPT."
By January 2025, ChatGPT reached 3.8 billion visits on desktop and mobile, more than double that of Bing and well above the rest. This marks a major turnaround after more than a year of stagnation. The upturn comes at a crucial time, when OpenAI is being challenged by DeepSeek.
DeepSeek, which rapidly gained popularity at the end of January, achieved 49 million visits in just one day, a third of ChatGPT's audience, despite the company being barely known outside China. This shows that new competitors can gain ground at lightning speed.
OpenAI benefits from ChatGPT's strong brand name. To reinforce this position, it is launching its first Super Bowl commercial today, while Google is doing the same for Gemini. If OpenAI succeeds in positioning ChatGPT as the standard for AI, it can maintain its lead even as chatbots become an everyday product worldwide.
Which competitors?
ChatGPT is way ahead of the competition. In January 2025, ChatGPT had 3.8 billion visits, compared with 1.8 billion for Microsoft Bing, 267 million for Gemini, 99.5 million for Perplexity and 76.8 million for Claude. Although these figures reflect Web traffic only, they show that OpenAI has built a huge lead. It's especially painful for Google, which just can't seem to "redirect" traffic from its search engine to Gemini.
OpenAI's quest for tens of billions
Journalist and investor M.G. Siegler, who is particularly prolific as a blogger again these days, explored why OpenAI needs $40 billion and how the relationship between OpenAI, Microsoft and Nvidia fits together in the excellent piece "The IPOpenAI."
As discussed last week, OpenAI plans to raise $40 billion, primarily to fund the massive computing power needed to train and run its AI models. Although there is a battle going on for talent in the AI sector which means staffing is also not cheap, by far the largest portion of this amount is going toward computing infrastructure such as power-hungry servers and data centers.
OpenAI in battle with Big Tech
The Big Tech companies, with Microsoft, Meta and Amazon leading the way, can invest tens of billions of dollars annually in their existing cloud infrastructures, funded from their huge profits. To compete, OpenAI must also raise tens of billions and has now ended up with SoftBank and sovereign wealth funds, mostly from the Gulf region.
To put it in perspective, according to Reuters, OpenAI expects an annual revenue of nearly $12 billion in 2025 at a loss of possibly $15 billion, at least if margins do not improve. It's going up against Meta with $200 billion in annual revenue, Microsoft with $250 billion, Alphabet with $300 billion and Amazon with even more than $500 billion in revenue this year. Even Oracle ($58 billion) and Salesforce ($38 billion) are profitable giants compared to the heavily loss-making OpenAi.
OpenAI raises more than historical IPOs
If OpenAI manages to raise $40 billion, it would be the largest amount ever raised by a company, even more than oil giant Saudi Aramco's $30 billion in 2019. By comparison, Visa raised nearly $20 billion in 2008 and Facebook $16 billion in 2012. But Facebook (now called Meta) did so at a valuation of under $100 billion, or less than a third of what OpenAI now considers itself worth.
The trend in the IPO market is that the biggest promising companies are choosing to remain private, thanks to the abundance of available capital. OpenAI's current funding round is an example of this shift, with companies raising huge sums of money without going public.
It is unlikely that OpenAI will succeed in becoming profitable any time soon, and then it will be a hell of a job next year to find parties willing to step in at a valuation of say $500 billion. It won't be possible to go much lower if SoftBank comes in now at $300 billion. How many investors will dare to explain to their shareholders next year that they are investing roughly $50 billion in OpenAI and not even getting ten percent of the shares in return?
Nvidia always wins
If SoftBank invests the $40 billion OpenAI wants, OpenAI will pay most of that money to Microsoft, on whose cloud services (Azure) it largely depends. In turn, Microsoft, with hat in hand and checkbook in its inside pocket, will be knocking on the door of Nvidia, which supplies the necessary chips and data center infrastructure.
In the AI world, it's simple: when it rains money at the top, it eventually pours down at Nvidia. SoftBank's pennies will end up, via OpenAI and Microsoft, at Nvidia..
This is precisely why I wrote last week that it makes no sense to expect Nvidia's revenue growth and profit margin to decline in the coming years; all doomsday scenarios from Wall Street notwithstanding. Microsoft is investing $85 billion in AI this year and Meta $65 billion. There are reportedly countries, not companies, that will also place such hefty orders with Nvida over several years.
The Big Tech companies have no choice but to order what Nvidia can deliver, because missing the boat in AI could mean the end of the supremacy of Microsoft, Google, Oracle, Salesforce and Amazon Web Services. But note that this is No Financial Advice!
Winner of 2025 so far: Palantir
An exception in the software sector struggling with the rise of AI is Palantir, which I have written about many times. The data analytics company remains secretive, but it seems increasingly likely that Palantir is one of the few software companies in the world that, through the use of AI, manages to both improve its software and reduce operating costs at the same time.
Despite selling relatively little Palantir software in Europe due to privacy concerns, the stock has risen 350% in a year. This week Palantir announced impressive financial results, again leading to a hefty rise in its share price: 22% in one day.
For the fourth quarter of 2024, the company reported revenue growth of 36% over the previous year, with total sales of $827.5 million. The U.S. market contributed significantly to this, growing 52% year over year. Since 2009, the company has secured more than $2.7 billion in U.S. government contracts, and it is likely that under President Trump, the U.S. government is going to take an even much larger cut from Palantir.
Morgan Stanley raised the rating for Palantir from "underweight" to "equal weight"and adjusted the price target from $60 to $95, referring to the strong quarterly results and positive outlook for 2025. Nonetheless, concerns remain about the high valuation of the stock, which sits at a stratospheric price-to-earnings ratio nearing 600. Palantir has been part of the S&P 500 and the Nasdaq 100 since last year, so it will also have a stronger impact on the prices of index funds and ETFs.
Palantir has been led for years by quirky co-founder Alex Karp, who said confidently at the presentation of the quarterly figures that Palantir likes to help governments and goes far in doing so: 'when it's necessary to scare enemies and on occasion, kill them..'
Andreessen Horowitz invests (de)centrally
Due to the success of CEOs like Karp and before him people like Bill Gates, Steve Jobs and Elon Musk, the perception has emerged in the tech world that centrally managed companies are the most successful and best at innovating. In this excellent piece, Miles Jennings of investment firm Andreessen Horowitz argues the opposite. Yet even Andreessen Horowitz still invests the majority of its billion-dollar budget in traditional centrally organized companies, especially in the AI world.
No product, 1-page website: worth $20 billion
Safe Superintelligence, an unusual AI startup with a one-page website co-founded last year by former chief scientist and co-founder of OpenAI Ilya Sutskever, is fund raising at a valuation of at least $20 billion. Small detail: the company is not yet making revenue and apparently does not yet have a product.
Sutskever's track record and SSI's unique approach are enough reason for great interest among investors. I previously wrote about the extraordinary scientist Sutskever, who became famous in the tech world mainly because Elon Musk and Google founder Larry Page broke off their friendship over a dispute over whose company Sutskever would join.
Musk can get into an argument walking into an empty house, but his fight with Page showed that Sutskever must have special qualities. Musk said of this in Lex Fridman's podcast, "It was mainly Demis Hassabis (ex-founder DeepMind, now head of AI at Microsoft, MF) on one side and I on the other, both trying to recruit Ilya, and Ilya hesitated. In the end, he agreed to join OpenAI. That was one of the hardest recruiting battles I've ever experienced, but that was really the key to OpenAI's success."
The new funding round would quadruple SSI's valuation from the previous round less than six months ago (!), when the company was still valued at $5 billion and raised $1 billion from five investors, including Sequoia Capital, DST Global and, of course, Andreessen Horowitz. There are apparently enough investors in Silicon Valley who would rather buy a reasonable stake in SSI at a $20 billion valuation, than be fobbed off with a smurf sized share in OpenAI at a $300 billion valuation.
