OpenAI just shut down its Sora video generator. It seems we're witnessing the beginning of the end of the GenAI bubble.

Hyperscalers like OpenAI never had realistic business models, but the Iran war and soaring energy costs have made these models even less viable.

If OpenAI is forced to evaluate the profitability of its services, it will likely keep military and B2B services, as well as cheaper, less computationally demanding text generators.

OpenAI has an added problem: compared to Anthropic's Claude, ChatGPT is now like Altavista's search engine compared to Google's in 1998. This realization is slowly seeping into the mainstream.

Due to its investments in data centers and contracts with computer hardware manufacturers, OpenAI has single-handedly drained the personal computer market of GPUs, SSDs, RAM, and hard drives. Exploding prices mean that local AI systems (local LLMs and image generators) are no longer viable alternatives for most people. This creates a bottleneck for AI image generation, from Sora to other AI image generator services.

The end of Sora could mean that OpenAI is in trouble and that the long-predicted AI industry crash similar to the 2000 dot-com crash is near.

#OpenAI #AI #sora #aibubble