Author: grimreeperrecession2026

Open AI does produce valuable Generative AI tools that we all find valuable. But is it irreplaceable? and is it really as valuable as all the money being poured into it? Why can’t over companies like Anthropic or the many AI companies created now replace the Gen AI features outputted from the Chat GPT engine?

The real question is: Does Open AI currently turn a profit?

The San Francisco-based company has not yet turned a profit. With all the money poured into Open AI, it could also amplify concerns about an AI bubble if the generative AI products made by OpenAI and its competitors don’t meet the expectations of investors pouring billions of dollars into research and development.

There is no major life function: eating, sleeping, drinking, mating that Open AI remotely solves. It’s a nice to have that makes automated processes more efficient.

The near future over the next 2 to 3 years will answer the question regarding whether these investments into Open AI will payoff, or generate massive write-offs on the balance sheets of the companies investing.

With the recent news that China is clamping down on exporting Raw materials that serve as the underpinning of AI Chips, the AI stock surge is OVER! Se Acabo! The Nasdaq, S&P and Dow that have been banking so hard on “AI darling” stocks are about to tumble real fast.

The rare earth materials that China is placing restrictions on are essential for the production of many computer chips, which are used in everything from smartphones to artificial intelligence systems.

The Rare Earth material restrictions placed by China are the most targeted action to limit supplies of rare-earth materials. This move is a follow-up from the April tariffs with China that were never rectified, and will result in China exercising long-arm jurisdiction over foreign companies to target the semiconductor industry.

The Export Controls China recently placed on Rare Earth materials may lead to week-long delays in shipments to companies like NVDA. The clearest risk all these “AI darling” companies face is an increase in the prices of rare earth-dependent magnets that are critical to the chip supply chain, 

Ask yourself, why do you think NVDA was so concerned a month ago with gaining access to the China markets? It’s not solely focused on the revenue generated from sales in China, but rather creating a stronger relationship in the government where the nucleus of their product is created.

This move will have a direct impact on the AI Darlings of late: NVDA, AMD, Apple, Oracle, etc….the prettiest girls in the Ballroom this past summer.

This is the thesis behind this post: The AI Boom is about to become the AI Burst!