Key Takeaways

• The risk profile is astronomical.If you're exposed to the Magnificent 7 through AI infrastructure bets, consider trimming.
• $5 billion annually to generate copyright-infringing memes.
• That's 15x growth in five years while costs keep exploding.Even Sam Altman admitted investors are "overexcited" about AI.

Key Development 1

NewsTechnology NewsTech NewsLegendary investor George Noble says OpenAI is falling in realtime, writes 600-word long note saying why he thinks Sam Altman's company is in deep troubleTrendingNYT Connections HintsWordleAmazon SaleQuote Of The Day By Jensen HuangMark CubanJeff BezosOppo Reno 15Jensen HuangBill GatesMark ZuckerbergNYT Connections HintsWordleAmazon SaleQuote Of The Day By Jensen HuangMark CubanJeff BezosOppo Reno 15Jensen HuangBill GatesMark ZuckerbergNYT Connections HintsWordleAmazon SaleQuote Of The Day By Jensen HuangMark CubanJeff BezosOppo Reno 15Jensen HuangBill GatesMark ZuckerbergLegendary investor George Noble says OpenAI is falling in realtime, writes 600-word long note saying why he thinks Sam Altman's company is in deep troubleTOI Tech Desk / TIMESOFINDIA.COM / Jan 21, 2026, 10:23 ISTCommentsShareAA+Text SizeSmallMediumLarge Veteran investor George Noble warns OpenAI is "falling apart" despite its $500 billion valuation.

He cites internal "Code Red" alerts, declining ChatGPT traffic, massive quarterly losses of $12 billion, and unsustainable costs for tools like Sora.

Reports suggest OpenAI's large training runs in 2025 failed to produce models better than prior versions.GPT-5 launched to widespread disappointment.

OpenAI's video tool Sora alone costs $15 million daily to run, with even its own lead engineer admitting the economics are "completely unsustainable."Then there's the talent exodus.

Key Development 2

His exact words: "Someone is going to lose a phenomenal amount of money."If I were running an AI startup with good traction right now, I'd be looking for an exit.

The gap between promised revolution and delivered reality has now never been wider.The smart money is rotating into sectors where valuations actually reflect fundamentals.Small and mid-caps are trading near decade lows relative to Big Tech while earnings growth is only marginally lower.Markets can price risk.

Veteran investor George Noble has now issued a stark warning about OpenAI, arguing the AI darling is "falling apart in real time" despite its eye-watering $500 billion valuation.In a scathing analysis on X, Noble highlighted what he calls unmistakable signs of trouble.

The risk profile is astronomical.If you're exposed to the Magnificent 7 through AI infrastructure bets, consider trimming.

Key Development 3

$5 billion annually to generate copyright-infringing memes.

That's 15x growth in five years while costs keep exploding.Even Sam Altman admitted investors are "overexcited" about AI.

The threat isn't hypothetical—ChatGPT traffic has now dropped for two straight months while Gemini exploded to 650 million monthly users.The financial bleeding is worse.

Key departures and Elon Musk's lawsuit further highlight significant internal turmoil and financial strain.

Key Development 4

Meanwhile Gemini jumped to 650 million monthly active users.The company that was supposed to build AGI can't keep its chatbot competitive.But the real story is the money…OpenAI lost $12 BILLION in a single quarter as per Microsoft's own fiscal disclosures.Deutsche Bank estimates $143 billion in cumulative negative cash flow before the company turns profitable.

Gone.Half the AI safety team departed.

But they can't price chaos.And OpenAI is chaos dressed up in a $500 billion valuation.About the AuthorTOI Tech DeskThe TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India.

Users called it "underwhelming" and "horrible." OpenAI had to restore GPT-4o within 24 hours because users preferred the old model.Altman had promised GPT-5 would make GPT-4 feel "mildly embarrassing." Instead, users complained it was worse at basic math and geography.They've released GPT-5.1, GPT-5.2 since.

Key Development 5

OpenAI's internal "Code Red" memo in December, where Sam Altman reportedly told employees to drop everything as Google's Gemini eats into ChatGPT's dominance.

Same complaints each time: too corporate, too safe, robotic, boring.The talent exodus makes this even worse:CTO Mira Murati.

Gone.President Greg Brockman.

Multiple executives reportedly cited "psychological abuse" under Altman's leadership.And now Elon Musk is suing for up to $134 billion.A federal judge just ruled the case goes to jury trial in April.

Key Development 6

Their analysts put it bluntly: "No startup in history has now operated with losses on anything approaching this scale."They're burning $15 million per day on Sora alone.

Now he wants his share of the $500 billion valuation.OpenAI called it "harassment." But the judge disagreed.Here's what I think happens next:The AI hype cycle is peaking.The diminishing returns are becoming impossible to hide.Competitors are catching up.

Salesforce CEO Marc Benioff publicly ditched ChatGPT for Gemini after using it for two hours.ChatGPT traffic fell in November.

Sell into the hype before the music stops.My positioning:I'm not touching OpenAI-adjacent plays at these valuations.

Key Development 7

The biggest red flag?

Meanwhile, GPT-5 flopped so badly that OpenAI had to restore GPT-4 within 24 hours after users revolted.Now Elon Musk's $134 billion lawsuit heads to trial in April, with a federal judge finding solid evidence OpenAI broke promises about staying nonprofit.Noble's bottom line: the AI hype is peaking just as reality catches up, and OpenAI needs to grow revenue 15x in five years while costs spiral out of control.Read George Noble’s full note on OpenAIOPENAI IS FALLING APART IN REAL TIMEI've watched companies implode for decades.This one has now all the warning signs.OpenAI declared "Code Red" in December.Altman sent an internal memo telling employees to drop everything because Google's Gemini 3 is eating their lunch.

There's "plenty of evidence" that OpenAI's leaders promised to maintain the nonprofit structure that Musk funded.Musk provided $38 million in early funding based on those assurances.

The lawsuits are piling up.OpenAI needs to generate $200 billion in annual revenue by 2030 to justify their projections.

Key Development 8

Even Sora's lead engineer admitted the "economics are currently completely unsustainable."Here's the big math problem nobody wants to discuss:It's going to cost 5x the energy and money to make these models 2x better.The low-hanging fruit is gone.Every incremental improvement now requires exponentially more compute, more data centers, more power.

CTO Mira Murati, Chief Scientist Ilya Sutskever, and half the AI safety team have all walked out the door.

Second month-over-month decline of 2025.

Noble points to Microsoft disclosures showing OpenAI burned through $12 billion in a single quarter.

Key Development 9

Gone.Chief Scientist Ilya Sutskever.

Gone.Chief Research Officer Bob McGrew.

Deutsche Bank projects the company is expected to rack up $143 billion in cumulative losses before seeing profit.

TOI Tech Desk’s news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe.

Key Development 10

Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.Read MoreEnd of ArticleFollow Us On Social MediaPhotostoriesHow to make classic Poha for breakfast at homeKaty Perry and Justin Trudeau: Top viral moments that defined 2025’s most unexpected romance5 real animals that survive by drinking bloodLesser-known facts about Brooklyn Beckham'A Knight of the Seven Kingdoms': Everything to know about the new Westeros spin-offHow to make Punjabi Lobia Masala for dinner at home‘Jana Nayagan’: Everything to know about trailer, posters, cast and more of Thalapathy Vijay’s starrer amid CBFC delayTop 10 countries with the highest government debtFrom Nimona to Samosa: 9 delicious local dishes made with Green Peas5 reasons you could be on the next layoff list of your company123Hot PicksSilver price todayBudget 2026Karnataka DGP ScandalGold price predictionNitin NabinPublic holidays January 2026Bank Holidays JanuaryTop TrendingMatthew StaffordKyle Larson and Katelyn Sweet Net WorthKlay ThompsonElina Svitolina and Gael Monfils Net WorthShane Lowry Net WorthTom BradyPaul Scholes and Claire Froggatt Net WorthJohn Harbaughs WifeNHL TradeKelly PiquetTired of too many ads?go ad free nowTrending StoriesIn SectionEntire WebsiteMonths after Donald Trump made 'angry call' to Jeff Bezos after learning Amazon plans to display added cost of tariffs; CEO Andy Jassy makes statement on Trump TariffsFTC Appeal Against Monopoly Ruling: US FTC challenges Meta court win; Instagram, WhatsApp at stakeNetflix to revamp its app to boost daily engagement; Takes on TikTok, Instagram and YouTubeHack of the day: How to get doorstep banking for seniors and disabled‘2026 is the new 2016’ Instagram trend: Why this throwback is taking over social media feedsAmazon Fire TV Stick 4K Select Review: 4K quality content on a budgetOpenAI Ad Revenue Projections: Analysts see $25B by 2030; Google faces new ad rivalSony is selling its TV and home entertainment division to one of the biggest Chinese consumer electronics company in the USQuote of the day by Elon Musk: "Really pay attention to negative feedback and solicit it, particularly from…"Samsung Galaxy S26 Ultra: Check expected launch date, price, specifications, and other informationKobe Bryant's wife Vanessa Bryant melts hearts with emotional birthday tribute to daughter Natalia while honoring the late NBA legendMatthew Stafford’s wife and four daughters wow Chicago crowds with synchronized Rams fashion flairMiami Heat vs Sacramento Kings (01-20-2026) game preview: When and where to watch, expected lineup, injury report, prediction, and morePhoenix Suns vs Philadelphia 76ers injury report: Injured and questionable players, head-to-head records, team stats, and more (January 20, 2026)Dan Lanning is on high alert after Lane Kiffin’s bold push for Jordan Seaton shakes transfer raceShane Lowry’s net worth: The relentless rise of Ireland’s major championPaul Scholes and Claire Froggatt combined net worth: Old Trafford success, contract details, lifestyle, and moreTom Brady’s stunned reaction to Fernando Mendoza captures Raiders’ growing interest amid early draft talkNHL Trade Buzz: Insiders speculate Detroit Red Wings to target New York Rangers star Artemi Panarin50 Maggi packets, 20kg rice, veggies, LPG cylinders: JeM’s winter bunker unearthed during Kishtwar encounter; terrorists stocked up for monthsTired of too many ads?go ad free nowDaily PuzzlesConnectThe Perfect TracePlay Now Loop the LoopPuzzle CircuitPlay Now Location GuesserGuess the SpotPlay Now Explore More Puzzles

What are your thoughts on this development? Share your opinion in the comments.