During a CNBC interview, Marcus warned that AI skepticism, rising financing costs and monetization concerns could expose vulnerabilities across the industry.
- Marcus drew comparisons with WeWork, pointing to OpenAI’s repeatedly delayed IPO plans as a potential warning sign.
- He noted that WeWork never completed its IPO, while OpenAI continues to push its own listing plans back.
- Marcus added that the bigger concern, however, is what happens if OpenAI cannot sustain its current valuation and is forced to seek an alternative.
NYU Professor Emeritus Gary Marcus believes that OpenAI’s ambitions and delayed IPO plans are raising uncomfortable questions about the sustainability of the artificial intelligence boom.
During an interview with CNBC, Marcus warned that growing skepticism around generative AI, rising financing costs and questions about whether companies can monetize their investments could expose vulnerabilities across the AI ecosystem.
He added that the company could become a cautionary tale for the industry, with potentially wider consequences for Nvidia Corp. (NVDA).
OpenAI Could Become The ‘WeWork of AI,’ Marcus Warns
Marcus questioned whether OpenAI’s business trajectory can live up to the expectations surrounding it. Drawing a comparison with WeWork, the once high-flying office-sharing company that never went public, he pointed to OpenAI’s repeatedly delayed IPO plans as a potential warning sign.
“OpenAI, for example, I’ve long talked about as possibly being the WeWork of AI,” Marcus said.
He noted that WeWork never completed its IPO, while OpenAI continues to push its own listing plans back. Marcus added that the bigger concern, however, is what happens if OpenAI cannot sustain its current valuation and is forced to seek an alternative.
“What if OpenAI is forced to sell at a discount to something like Microsoft?” Marcus asked. He then raised the potential consequences for Nvidia, whose chips have powered much of the industry’s AI infrastructure spending.
“What would be the effect on Nvidia of that if they’re kind of poster child had to take a big hit,” he said.
Nvidia’s Biggest AI Risk May Be Whether Customers Can Make Money
Marcus believes Nvidia’s strong technology and execution do not necessarily guarantee that demand for its chips will continue growing indefinitely.
“I think Nvidia is very well run. The chips are great, but there’s a question about whether there’s infinite demand and whether the companies buying it can make a profit from it,” he said.
He also warned that the AI infrastructure boom could face a financing crunch, particularly among neocloud companies that depend heavily on external funding to expand their computing capacity.
“I think the neoclouds are the most vulnerable here. They need the financing. The financing is getting more expensive. They’re in trouble,” Marcus said.
The risk, he added, is that financial stress among these companies could spread across the broader AI ecosystem, including Nvidia.
Beyond financing, Marcus questioned whether the enormous investments in AI infrastructure are translating into meaningful productivity gains. Citing a Bank of England study involving approximately 10,000 decision-makers, he said the findings pointed to limited productivity improvements so far. Ultimately, he suggested that changing investor sentiment could prove just as important as financial fundamentals.
“To the extent that people lose faith in generative AI as being a rocket that hurts a company like Nvidia,” Marcus said.
During the after-hours session on Friday, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, gained 0.17%; the Invesco QQQ Trust ETF (QQQ) rose 0.21%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) edged up by 0.06%. Retail sentiment on Stocktwits toward the S&P 500 ETF was in the ‘bearish’ territory at the time of writing.
The Global X Artificial Intelligence & Technology ETF (AIQ) rose 1.32% on Friday, while the iShares U.S. Technology ETF (IYW) gained 1.31%.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<