OpenAI Wants A Government Bailout

There were two strange updates in the AI world last week.

First, OpenAI proposed giving the Trump administration a five percent stake in the company.

That stake would be worth roughly forty-three billion dollars.

Sam Altman has reportedly argued that a government stake in the company would be the best way to share in the upside of AI with the public, and there's a vision for other AI companies to potentially join in, essentially creating a sovereign wealth fund.

And then in the second piece of news, Meta is reportedly becoming a cloud provider.

The company is preparing to sell its excess AI computing capacity.

That is a notable shift after spending billions to build out infrastructure that it previously said would be necessary for its own AI ambitions.

Investors did welcome the news though, sending Meta shares up nearly nine percent, but the reaction wasn't nearly as positive elsewhere.

Shares of Neo cloud companies like CoreWeave and Nebius fell roughly twelve percent on the news.

So Scott, lots to get into in the AI department here.

First, I'm just gonna take my own little personal victory lap because if you follow me on Twitter, you know that I actually bought Meta last week at five hundred and sixty-four dollars.

Here we are.

The reason I bought it is 'cause I thought the stock was way undervalued, trading at twenty times earnings, S&P trading at twenty-five times, so that's pretty cheap relative to the rest of the market, and this is a player that obviously is positioned for AI if we do see an AI boom.

Plus, the last time it traded that low was in twenty twenty-two, and since then revenues have grown more than seventy percent, gross margins have increased two hundred basis points.

So the whole thing just looked very attractive.

The market was very worried that Zuckerberg was investing all of this money into these data centers, but hadn't laid out a plan for how he was gonna monetize those data centers.

Well, now he's given us the answer, and he's basically just gonna do what AWS did and what the cloud providers do, where you just rent out the chips and sell it to enterprises.

Now, there is a lot of debate over whether this is actually bullish or bearish, because what we also know is that the plan was to use all of that compute to build their own AI products.

And now they're saying, "No, we're not gonna do that anymore.

We're gonna sell it to someone else, and someone else is gonna build the AI products," which begs us question, who's gonna build the AI products? And why isn't Meta down to do it if they are one of the most capitalized companies in the world, and they are supposedly supposed to be a leader in AI? That's the bearish question.

Lots to get into your reactions.

This sent chills down my spine, or I had real déjà vu of '99 again because wh- what do we have here? Essentially, and I, I, I don't listen to markets unless I...

Or nor enjoy it unless I'm on it.

[chuckles]

But I was-- I did find that guy you had on, Ed Zitron, Citron, he's very good, and I, I was fascinated by what he said.