Altman's Folly: Circular AI Financing Exposed: OpenAI Burns Billions While Fears Of A Bubble Grow | Between The Lies 013

Everywhere you look today, AI is on everyone's tongue. Nowhere more than Wall Street. But is this the beginning of a new economy or just the next bubble ready to burst? Welcome to Between The Lies, where we cut through the hype to give you the real story on what's happening with your money. I'm Nicky P, joined by the money truth-tellers at Perfect Spiral Capital - Luke Tatum and Rob Brayton.

 

This week we're tackling something inspired by Patrick Boyle's compelling analysis: AI's circular financing scheme that's inflating a bubble nobody wants to acknowledge. OpenAI alone has a $7.8 billion operating loss for the first half of 2025, yet we keep propping up valuations on "trust me bro" economics.

 

What We Cover:

• OpenAI's staggering losses and why only 5% of ChatGPT users actually pay
• The circular financing loop between AI tech suppliers, infrastructure companies, and investors
• How 20-50% of the S&P 500 has meaningful exposure to potentially failing AI companies
• Why DeepSeek's cheaper alternative caused market panic
• The energy crisis: AI data centers burning through power faster than infrastructure can support
• Historical parallels to the dot-com bubble and government-subsidized railroad expansion
• Nuclear power as the only real solution (and why we're 5-7 years away minimum)

Key Takeaways: Luke breaks down the "trust me bro" model where companies like OpenAI run $4 billion credit lines at 6% while burning GPUs that depreciate in five years. Rob explains why this feels exactly like the dot-com era - huge valuations, no revenue streams, everyone scrambling to not miss the party like they did with Bitcoin.

I call out the mal-investment and government manipulation that's propping up companies that should have already folded. When the White House starts buying stakes in AI companies, you know this is at least partially artificial.

 

The Reality Check: Before 1971's gold standard abandonment, we had zero government shutdowns. Coincidence? Rob draws parallels to how many car companies existed when automobiles first emerged versus how many survived. This shake-out is coming.

The silver lining? If you understand fundamentals and avoid speculation, you won't get caught holding the bag. Focus on what you can control - your banking function, capital deployment, and assets that aren't exposed to circular AI financing schemes.

 

Perfect Spiral Capital Insight: Luke and Rob emphasize investing only in what you know and understand. When everyone's blindly throwing money at AI hoping to catch the next wave, smart money focuses on fundamentals. Insurance companies don't buy AI speculation - they build wealth through proven systems.

 

Ready to build wealth outside speculative bubbles? Visit PerfectSpiralCapital.com/podcast for the free toolkit.