OpenAI $207B Shortfall, AI Replaces 11.7% of Workforce: MIT

Welcome to today's edition of AI Business Weekly. A sobering HSBC report estimates OpenAI won't achieve profitability by 2030 and still needs to raise another $207 billion to power its growth plans, while an MIT study finds AI can already replace 11.7% of the U.S. workforce today. As questions mount about AI's path to profitability and its immediate impact on employment, the industry continues attracting capital with Vijil raising $17 million and a new $15 million fund launching to back AI and robotics innovators. Meanwhile, the revived Vine platform is taking a hard stance against AI-generated content, explicitly banning AI creators from its relaunch as DiVine. Today's stories capture the fundamental tensions defining this moment: massive capital requirements meeting uncertain business models, workforce disruption happening faster than expected, and platforms choosing sides on whether AI-generated content belongs in creative spaces. Let's dive in.

The iconic short-form video platform Vine has been rebranded as DiVine and explicitly bans AI-generated content and creators. The platform, which had 200 million users at its peak before shutting down in 2017, helped launch careers for creators like Shawn Mendes, Logan Paul, and David Dobrik. The relaunch's anti-AI stance positions DiVine as a haven for human creators amid growing concerns that AI-generated content will flood social platforms. Read more

Vijil, a Menlo Park-based AI software company, raised $17 million in funding led by BrightMind Partners, bringing total funding to $23 million. Mayfield and Gradient Ventures participated in the round. BrightMind Partners focuses on early-stage investments in enterprise technology and AI, particularly in cybersecurity and enterprise infrastructure. Read more

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Carles Reina, the first investor in ElevenLabs, launched Baobab Ventures with a $15 million fund targeting AI and robotics innovators. The fund aims to help early-stage startups navigate an environment where traditional customer acquisition approaches like cold outreach have lost effectiveness. Baobab focuses on backing founders who deeply understand how to build and scale businesses in the AI era. Read more

HSBC estimates OpenAI won't achieve profitability by 2030 and still needs to raise another $207 billion to power its growth plans despite ChatGPT's blockbuster success. The analysis highlights the fundamental question of how OpenAI will balance ChatGPT's endless appetite for compute provided by data centers with a business model that moves from losses to profits. The report adds fuel to ongoing concerns about an AI bubble, even as Nvidia continues delivering strong quarterly results. Read more

An MIT study found that artificial intelligence can already replace 11.7% of the U.S. labor market today, not in some distant future. The research used the Iceberg Index, a labor simulation tool created by MIT and Oak Ridge National Laboratory, to identify which jobs AI can currently perform. For lawmakers preparing billion-dollar reskilling and training investments, the index offers a detailed map of where disruption is forming down to the zip code level. Read more

HSBC's brutal assessment of OpenAI lays bare the uncomfortable economics beneath AI's hype. Despite ChatGPT becoming the fastest-growing consumer application in history, the path from usage to profitability remains unclear. The $207 billion funding gap isn't just about building more data centers. It represents the cost of maintaining technological leadership while competitors with deeper pockets like Google, Microsoft, and Amazon can subsidize AI losses indefinitely through profitable core businesses. MIT's finding that AI can already replace 11.7% of workers adds urgency to the profitability question. If displacement happens faster than monetization, we face a scenario where AI destroys jobs before creating sustainable businesses. The workforce impact isn't theoretical or distant. It's measurable today down to specific zip codes. DiVine's ban on AI creators reflects growing recognition that not everyone welcomes AI-generated content flooding creative platforms. When a revived social network explicitly positions itself against AI, it signals that audiences may be developing AI fatigue even as the technology improves. The contradiction is stark: billions flow into AI startups while foundational questions about profitability, workforce impact, and content authenticity remain unresolved. Whether OpenAI finds its $207 billion and a path to profit, or whether we're witnessing speculative excess on an unprecedented scale, will define the next chapter of this revolution.