Blind boxes are big business — just ask anyone caught up in the Labubu craze — and the latest entry comes from 133-year-old film icon Kodak, which just had its very own “Kodak moment” with its palm-sized “Chamera.” Customers raced to buy the gadgets, not knowing which of the ’80s-inspired designs was inside each box, and the camera quickly sold out as it also tapped into Gen Z’s embrace of nostalgia. The Magnificent 7 and most stocks in the AI ecosystem (with the exception of Nvidia) did the lion’s work in propelling the S&P 500 and Nasdaq 100 to another day of record closing highs. The benchmark US stock index rose 0.5%, the tech-heavy gauge was up 0.8%, and the Russell 2000 advanced 0.3% on Monday. |
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There’s a playbook in Silicon Valley: raise some money; build something people want; raise a lot more money; burn it in the pursuit of growth. The core of this strategy is to swap money for time by acquiring talent, companies, infrastructure, and technologies, all in the pursuit of leapfrogging your competition in the burgeoning field you’re disrupting. Then, if you’re successful in ascending to the top: kick back, up your prices, and rake in the billions. But no company has ever burned as much money as OpenAI is planning to. |
- In the last few weeks, major deals with Broadcom and Oracle have thrown into sharp relief just how insane OpenAI’s ambitions are. The Oracle deal alone is worth $300 billion over five years starting in 2027.
- OpenAI does not have that kind of cash. In fact, four of the tech world’s big “cash incinerators” — Uber, Tesla, Snap, and Netflix — together burned a pathetic ~$42 billion during their respective heavily cash-burning periods.
- Per The Information, OpenAI is planning on spending $115 billion through 2029. Given that the company raised “only” $40 billion earlier this year — and $64 billion in its lifetime to date, per Pitchbook data — it’s fair to assume that OpenAI will have to dip into the capital markets again to raise another $50 billion to $75 billion to fund its spending splurge.
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Just a few years ago, the idea of raising that amount on the deeply liquid public markets would have been remarkable; the biggest IPO ever was 2014’s Alibaba, which raised $25 billion — a figure that might not cover even a single year of OpenAI’s peak cash burn. Doing it in private markets would have been near unthinkable. |
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If the company pulls it off — raises all that money and finds a way to make the unit economics of its chatbot work along the way — it will raise a major question: is the stock market doing its primary job? If the most capital-hungry business of all time doesn’t need to raise on the public markets, we may need to rethink our textbook definitions of the stock market. The capital-allocating conduit that’s been the bedrock of American capitalism for more than a century is increasingly about price discovery, liquidity, and risk transfer, and less about capital formation. |
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Former Zillow Exec Opens the Door to a $1.3T Market |
Austin Allison sold his first company for $120M. He later served as an executive for Zillow. But both companies didn’t allow regular people to invest at the private stage. “I always wished everyday investors could have shared in their early success,” Allison later said. So he built Pacaso differently. Pacaso brings co-ownership to the $1.3T vacation home market,1 earning $110M+ in gross profit in just 5 years.2 No wonder five major investment firms already backed Pacaso. They even reserved the Nasdaq ticker “PCSO”.3 Now, after adding 10 new international destinations, Pacaso is hitting their stride. And unlike Allison’s previous stops, you can invest in Pacaso as a private company. But you don’t have time to waste. Invest before Pacaso’s opportunity ends this Thursday.4 |
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Lately, the stock has been recovering as Tesla expands a limited version of its robotaxi service and tries to boost its energy storage business, unveiling new Megapacks last week. Despite an expected overall vehicle sales decline this year, Tesla could have a record third quarter as would-be buyers try to get ahead of federal tax credits disappearing at the end of September. |
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Earlier this month, the board of directors proposed an eye-watering pay package that could award the tech billionaire up to $1 trillion, assuming that very ambitious market cap and fundamental milestones are met. |
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