Karla Barker 
Changpeng Zhao, the founder of Binance, warned on Friday that most artificial intelligence companies are likely to fail, even as major players like Anthropic and OpenAI continue to attract enormous investment. His comments came during an unusually active period in AI fundraising, with two private firms now collectively valued near $1.8 trillion.
Zhao posted on X that AI itself will grow exponentially, but he believes the current number of AI firms is unsustainable. “There are just too many,” he wrote, adding that even the survivors will face significant price fluctuations and competition from new entrants. He framed this as a normal pattern in early-stage industries, where a flood of capital typically produces only a few lasting winners.
His warning is notable given the scale of recent investment. Anthropic announced a $65 billion Series H round on Thursday at a post-money valuation of $965 billion, almost tripling its value since February. The round was led by Altimeter Capital, Dragoneer, Greenoaks, and Sequoia Capital. The company also reported a $47 billion annualized revenue run rate, up from $30 billion earlier this year.
OpenAI, meanwhile, is valued at $852 billion after its March funding round and is preparing a confidential S-1 filing with Goldman Sachs and Morgan Stanley. Analysts expect its public market debut, possibly as soon as September, to push its valuation past $1 trillion.
Profit Still Lags Behind Spending
However, the optimism surrounding these leading firms stands in contrast to the experiences of corporate AI buyers. Uber CEO Dara Khosrowshahi told analysts in May that the company was slowing hiring to absorb its AI investments, while struggling to show clear returns. Uber’s CTO disclosed in April that the firm had used up its entire 2026 budget for Anthropic’s Claude Code and developer tool Cursor in just four months.
This pattern is not unique to Uber. Data from the National Bureau of Economic Research, published in February, showed that 90% of firms reported no measurable AI impact on workplace productivity. OpenAI itself has guided to annual losses through at least 2028, including $74 billion in operating losses that year alone, even as it commits to $1.4 trillion in datacenter spending over eight years.
Hyperscaler Revenue Loops Under Scrutiny
Concerns are growing about the revenue loops between AI firms and cloud providers. Anthropic and OpenAI together underwrite more than half of the roughly $2 trillion in future cloud commitments held by Microsoft, Amazon, Google, and Oracle. This creates a situation where the largest AI companies are also the biggest customers of the same cloud giants that invest in them.
Whether Zhao’s prediction holds true likely depends on how quickly AI revenue can catch up with AI costs. Anthropic expects to reach operating profitability this quarter for the first time, but most of the sector still spends far more than it earns. The next major test will come when OpenAI’s S-1 filing reveals what a trillion-dollar AI company actually looks like on a balance sheet.