An AI critic is warning that OpenAI's failure would be the Lehman Brothers of the AI bubble

Ed Zitron argues OpenAI is the load-bearing pillar of a multitrillion-dollar AI spending cycle with no real return on investment

By Cris Tolomia2 min readUpdated July 17, 2026

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An AI critic is warning that OpenAI's failure would be the Lehman Brothers of the AI bubble

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Ed Zitron, a technology critic and newsletter author, is warning that OpenAI's failure would function as a market-shaking collapse comparable to the fall of Lehman Brothers, arguing that the entire AI industry's financial architecture depends on a single company continuing to exist.

In a post published Wednesday on his newsletter Where's Your Ed At, Zitron contends that OpenAI is "one of the largest liabilities in recent economic history" and that without it, the justification for trillions of dollars in capital expenditure across the technology sector evaporates. "Should it fail, the reverberations would mark a turning point — the AI era's Lehman Brothers moment, closing one chapter of economic history and violently opening the next," he wrote.

Zitron argues the AI bubble is not grounded in measurable returns but in what he calls "cult-like psychosis" infecting wealthy investors and institutions. He traces the current spending cycle to the November 2022 launch of ChatGPT, which he says gave a struggling tech industry a narrative to justify massive infrastructure investments. He also argues that Anthropic, OpenAI's closest competitor, only exists because of the mythology surrounding OpenAI, and faces the same underlying financial pressures.

Central to his argument is OpenAI's financial exposure. The company intends to spend more than $50 billion on compute this year and has made roughly $748 billion in performance obligations to Microsoft $MSFT, Amazon $AMZN, and Oracle $ORCL, according to his analysis. OpenAI is also carrying the weight of a $122 billion funding round that has not fully closed, with SoftBank Group contributing $30 billion in tranches — the third of which is due October 1, 2026.

Zitron contends that a payment stoppage to infrastructure partners such as Oracle and CoreWeave would leave those companies without the cash flow needed to meet their own debt commitments. Oracle, he notes, has committed more than $340 billion to build data center capacity for OpenAI as part of a $300 billion compute contract, and has seen its credit rating cut to the lowest investment-grade level by S&P Global $SPGI — with OpenAI named as a key credit risk in the agency's own language.

OpenAI submitted a confidential IPO filing with the Securities and Exchange Commission last month at an $852 billion valuation, with Goldman Sachs $GS and Morgan Stanley $MS leading the process. The company is leaning toward delaying its public offering until 2027, after advisers warned that a $1 trillion valuation — which CEO Sam Altman has called a minimum — may not be achievable in current market conditions. OpenAI posted a net loss of $38.5 billion in 2025 on $13.07 billion in revenue.

Zitron's newsletter closes with a stark prediction: "I believe that once OpenAI collapses it'll have a violent, punishing effect on the entire stock market, a precursor to a much greater drawdown as everybody accepts that the AI bubble has burst."

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