TheBadPlaceyahoo news | Why Does It Suddenly Feel Like OpenAI Is Melting Down Into Disaster?
Just under three and a half years after its watershed ChatGPT moment, OpenAI now looks almost unrecognizable. After a meteoric rise to a valuation of up to $1 trillion—a jump from $29 billion in early 2023—the company has been hit by a succession of mis‑steps. In February it snapped up a lucrative Department of Defense contract that Anthropic had rejected on ethical grounds, a move Sam Altman later called “opportunistic and sloppy.” The deal sparked a wave of user backlash, with ChatGPT uninstall rates spiking overnight and exposing OpenAI to criticism for appearing to prioritize money over principles.
The fallout continued when OpenAI abruptly shut down its text‑to‑video app Sora, branding it an “unholy abomination” riddled with copyright‑infringing material. The termination blindsided Disney, which had just signed a $1 billion deal with OpenAI and was meeting to discuss a Sora‑related project minutes before the news broke. Simultaneously, the company’s finances are under pressure: despite claiming it will reach $100 billion in advertising revenue by 2030, spending still far outpaces revenue, prompting a revision of its infrastructure budget from $1.4 trillion to $600 billion through 2030. Leadership turmoil added to the chaos, with Fidji Simo announcing a medical leave and CMO Kate Rouch stepping down to recover from cancer.
A recent investigative piece in The New Yorker painted a grim portrait of OpenAI’s internal culture, depicting Altman as a “relentless liar” lacking technical expertise, and suggesting the company’s early lead is eroding as rivals pull ahead. With an IPO on the horizon, executives are scrambling to tighten the balance sheet and reassure investors, while insiders warn that Altman could end up remembered among the most notorious tech scandal figures. The accumulation of controversial deals, product reversals, financial strain, and leadership exits signals that OpenAI is fighting to stabilize a business once seen as the industry’s golden child.
