Three years after ChatGPT stormed onto the scene, crowning OpenAI as the undisputed king of artificial intelligence, the crown appears to be slipping. What began as a technological coronation has morphed into a fight for survival, with high-profile investors now openly questioning if the Silicon Valley darling has the stamina to endure.

For the Kenyan tech ecosystem—which has rapidly integrated OpenAI’s API into everything from fintech customer support to freelance content creation—the stakes are high. If the engine powering these innovations falters, the ripple effects will be felt from Westlands to Silicon Savannah.

The Netscape Warning

The most damning critique comes from Michael Burry, the investor immortalized in the film The Big Short for predicting the 2008 financial crisis. Burry has drawn a chilling parallel between OpenAI and Netscape, the web browser that dominated the mid-1990s before being obliterated by Microsoft’s Internet Explorer.

“OpenAI is the next Netscape, doomed and hemorrhaging cash,” Burry declared in a recent post on X (formerly Twitter). The analogy suggests that being the first mover does not guarantee longevity, especially when deep-pocketed rivals like Google and Meta begin to flex their muscles.

Burning Billions

Beyond historical comparisons, the financial realities are stark. Gary Marcus, a researcher known for his skepticism regarding AI hype, argues that OpenAI has squandered the massive lead it secured with ChatGPT’s launch in November 2022.

Marcus noted that the startup is “burning billions of dollars a month.” To put that into a local perspective, a burn rate of just $1 billion equates to approximately KES 129 billion—a figure that rivals the entire annual budget of some Kenyan ministries. This level of expenditure is driven by the astronomical costs of computing power required to train and run advanced models.

• The Cost of Intelligence: Running massive language models requires data centers that consume city-sized amounts of electricity.
• The Commoditization Trap: As rivals release open-source models (like Meta’s Llama series), the premium value of OpenAI’s proprietary tech diminishes.
• The Revenue Gap: While user numbers are high, profitability remains elusive due to the sheer operational overhead.

A Shifting Landscape

While OpenAI remains a household name, the gap has closed. Competitors have matched the capabilities of ChatGPT, often at a lower cost to developers. For Kenyan startups operating on thin margins, the loyalty to OpenAI is tested every time a cheaper, equally capable alternative hits the market.

Marcus remains pessimistic about the company's trajectory, stating, “Given how long the writing has been on the wall, I can only shake my head as it falls.” Whether OpenAI can pivot from a cash-burning pioneer to a sustainable business empire remains the defining question of the year.