Binance founder Changpeng Zhao (CZ) argued on Friday that most artificial intelligence (AI) companies will go bust, even as Anthropic closed in on a $1 trillion valuation and OpenAI moved toward its initial public offering (IPO).
His warning landed during one of the busiest stretches in AI fundraising history, with two private firms now collectively valued near $1.8 trillion and several smaller startups still struggling to convert heavy spending into profit.
CZ Predicts an AI Shakeout Despite Sector Growth
Zhao posted on X that AI itself “will stay and grow exponentially,” but said the current crop of AI firms is far too crowded to survive. He added that even the eventual winners will see “huge price fluctuations” and face fresh competition from new entrants.
“AI will stay and grow exponentially. But most AI companies will go bust. There are just too many. Even survivors will see huge price fluctuations. There will be new survivor entrants too. Same as any other new industry, really,” CZ posted.
CZ framed the situation as a normal pattern in early-stage industries, where a flood of capital tends to produce only a small number of long-term winners. He has previously argued that AI agents need tokens in only a narrow set of cases, signaling broader skepticism about much of the current AI build-out.
His comments come as capital continues to pour into a handful of frontier labs at a record pace.
Anthropic announced a $65 billion Series H round on Thursday at a $965 billion post-money valuation, almost tripling its $380 billion mark from February, according to CNBC. The round was led by Altimeter Capital, Dragoneer, Greenoaks, and Sequoia Capital, lifting the firm above rival OpenAI in implied worth.
The company also reported a $47 billion annualized revenue run rate, up from $30 billion earlier this year and $10 billion in full-year revenue last year. Recent reports peg Anthropic’s implied pre-IPO valuation on Jupiter prediction markets above the pre-IPO trillionaire mark, placing it alongside SpaceX and OpenAI.
OpenAI sits one rung lower, valued at $852 billion after its March mega-funding round. The ChatGPT maker is now preparing a confidential S-1 filing with Goldman Sachs and Morgan Stanley, targeting a public market debut as soon as September at a price analysts expect to push past $1 trillion.
Uber’s AI Bill Shows Why Profit Still Lags Spend
The optimism around Anthropic and OpenAI sits uneasily next to the experience of corporate AI buyers. Earlier in May, Uber CEO Dara Khosrowshahi told analysts that the ride-hailing firm was slowing hiring to absorb its AI investments, while struggling to show clear returns from the spend.
Uber CTO Praveen Neppalli Naga disclosed in April that the company had burned through its entire 2026 budget for Anthropic’s Claude Code and developer tool Cursor in only four months. The COO also publicly questioned whether higher AI token usage was actually improving consumer products, saying that link “is not there yet.”
The pattern is not isolated. National Bureau of Economic Research data published in February showed 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.
Concerns over hyperscaler revenue loops have intensified, with Anthropic and OpenAI alone underwriting more than half of the roughly $2 trillion in future cloud commitments held by Microsoft, Amazon, Google, and Oracle.
Whether Zhao’s call ages well depends on how quickly AI revenue catches up with AI cost. Anthropic is on track for its first operating profit this quarter, but most of the sector still spends faster than it earns. The next real test arrives when OpenAI’s S-1 reveals what a trillion-dollar AI company actually looks like on a balance sheet.
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