--- title: "Why Does It Suddenly Feel Like OpenAI Is Melting Down Into Disaster?" description: "Just under three and a half years after its watershed ChatGPT moment, OpenAI seems almost unrecognizable and struggling to find its footing." date: "2026-04-12" modified: "2026-04-12" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/artificial-intelligence/openai-melting-down-disaster" categories: - "Anthropic" - "Artificial Intelligence" - "Ethics" - "OpenAI" --- # 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 seems almost unrecognizable and struggling to find its footing.]() *Anna Moneymaker/Getty Images* OpenAI is [gearing up]() for a potential IPO later this year at a staggering valuation of up to $1 trillion — a meteoric rise from a mere $29 billion in January 2023, months after launching ChatGPT. Just under three and a half years after its watershed moment, OpenAI seems almost unrecognizable. This year, in particular, has been a rude awakening for the Sam Altman-led company, with a string of bad news and controversies raising some hard-to-ignore questions about its long-term viability and ability to keep up with increasingly steep competition. Kicking off a bruising year was OpenAI diving in to snap up a lucrative Department of Defense contract in late February after Anthropic walked away from the table. The latter company's CEO, Dario Amadei, [made it clear]() that its AI models shouldn't be used for mass surveillance of Americans and autonomous weapon systems — a principled stand that the Pentagon refused to agree to. It was a PR disaster on OpenAI's part. Altman later admitted that the move "[looked opportunistic and sloppy]()," but the damage had already been done. The eyebrow-raising deal triggered a mass exodus with [uninstall rates]() of ChatGPT spiking overnight and making Anthropic look incredible by comparison — at the exact moment that its models have been pulling decisively ahead among programmers. Less than a month later, OpenAI announced it was [killing]() its text-to-video AI app, Sora, an "[unholy abomination]()" that was riddled with copyright infringing material and mindless AI slop. As the [*Wall Street Journal* reported]() at the time, the company was desperately looking to free up computing resources to power its next-generation models — another implicit admission that Anthropic is starting to eat its lunch. Even worse, the decision blindsided Disney, which had just signed a $1 billion contract with OpenAI in December. According [to *Reuters*](), executives from both companies had met to discuss a project linked to Sora mere 30 minutes before news emerged that the app was getting shanked, once again highlighting how incredibly messy things have become behind the scenes. Meanwhile, OpenAI executives are racing to contain a financial bloodbath. While the company claims it will reach $100 billion in just advertising revenue by 2030, its current financial predicament should have anybody take that figure with a massive grain of salt. Spending is still vastly outpacing the company's relatively meager revenue, despite OpenAI [revising its $1.4 trillion infrastructure commitments through 2030]() to $600 billion in February — less than half of what it had originally planned to spend. And OpenAI’s CEO of applications, Fidji Simo, who's [led the charge in trying to cut the fat]() and refocus the company on coding and enterprise, unexpectedly announced earlier this month that she would be going on medical leave. The company's chief marketing officer Kate Rouch had also announced she would be stepping down to focus on her health and recover from cancer. Capping off a tumultuous couple of months, a lengthy [investigative piece from *The New Yorker*]() summarized the precarious situation OpenAI finds itself in, with tech insiders painting an unflattering picture of OpenAI CEO Sam Altman as a [relentless liar and master manipulator]() who [lacks technical knowledge]() in both programming and machine learning expertise. In short, it doesn't take much to see a company in distress, which grabbed and early lead but whose business decisions simply aren't landing. With an IPO on the horizon, all signs point toward OpenAI desperately trying to scrounge together a less heart attack-inducing balance sheet to show investors, who are [already primed to expect the worst](). "I think there’s a small but real chance \[Sam Altman is\] eventually remembered as a Bernie Madoff- or Sam Bankman-Fried-level scammer," one senior exec at Microsoft told *The New Yorker.* **More on OpenAI:** [*Sam Altman's Coworkers Say He Can Barely Code and Misunderstands Basic Machine Learning Concepts*]() ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()