They are spending a lot on shovels but it’s not clear that there is that much “stuff” (consumer demand) to be shoveled.

VC money can only take you so far, you still need to have an actual way of making money.

LLMs might effectively replace Google but they are already a commodity. It’s really not clear what moat OpenAI can build when there are already a bunch of proprietary/open models that are more or less on the same level.

That basically means that they can’t charge much above datacenter cost + small premium longterm and won’t be able achieve margins that are high enough to justify current valuation.