Key Takeaways
- Michael Burry posted that markets should “tank hard” to stop the OpenAI and Anthropic IPOs, a day before headlines that OpenAI is reportedly in talks to raise $30 billion at a $1.4 trillion valuation.
- According to Fareed Zakaria, OpenAI has about $750 billion of spending commitments through 2030 against roughly $40 billion of revenue this year, so it needs public investors to pay its bills.
- Microsoft’s exposure goes beyond its OpenAI stake, because its own capital spending depends on OpenAI being able to keep paying for compute.
- The thing to watch is whether the IPO window stays open, since that window is how OpenAI plans to fund its commitments.
Michael Burry, the investor made famous by The Big Short, has a request for the stock market. (It’s not a small one.)
“For the benefit of humanity, the markets should tank hard and prevent the OpenAI and Anthropic IPOs,” he posted on X on Tuesday.
A follower replied that the labs would lose value once they went public. Burry went further: “These are companies that are going suck up and then destrop TRILLIONS of dollars of capital, and that will be the least of the damage they do.” (Typos his.)
Then on Wednesday came headlines that OpenAI is reportedly in talks to raise another $30 billion at a $1.4 trillion valuation.
To Burry, that is the whole problem.
The $750 billion bill
Burry’s case rests on the gap between what these labs earn and what they’ve promised to spend. CNN’s Fareed Zakaria put numbers on it on The Prof G Pod:
“OpenAI’s revenues are around $40 billion this year. Their spending commitments between now and 2030 are $750 billion.”
Here’s the math. $750 billion ÷ $40 billion comes to almost 19 years of this year’s revenue, promised over roughly four years. Even the $30 billion round would cover just 4% of it ($30 billion ÷ $750 billion).
That’s a bill OpenAI’s revenue can’t come close to paying, so outside money has to fill the gap. Jack Raines explained on a later Prof G Pod episode where that money has to come from:
“OpenAI and Anthropic need to go public now because the private markets are basically tapped out.”
In other words, the IPO is the funding plan. If Burry gets his wish and the market breaks hard enough to shut the window, the commitments are still there.
Who’s on the other side of the bill
That raises a question: who is OpenAI paying, and who owns a piece of it? The answer is Microsoft (MSFT). It’s one of OpenAI’s listed backers, alongside NVIDIA (NVDA). As CNBC’s Andrew Ross Sorkin said on Squawk Pod:
“companies like Amazon, Google, all have big stakes in Anthropic, already are carrying them at relatively high valuations. That puts pressure then on the valuation of an open AI, which of course, companies like NVIDIA and Microsoft have stakes and SoftBank have stakes in.”
There’s an old line often credited to J. Paul Getty: if you owe the bank $100, that’s your problem; if you owe the bank $100 million, that’s the bank’s problem.
OpenAI has promised its suppliers $750 billion. Same deal here.
Isn’t Microsoft too big to feel it?
Here’s the obvious objection. Microsoft’s software and cloud business is enormous and diversified, so even a sharp markdown of its OpenAI stake may not move earnings much.
On the stake alone, I’d agree. But the stake is the smaller piece of the exposure. OpenAI buys compute from Azure, Microsoft’s cloud business (it agreed in October 2025 to buy an additional $250 billion of Azure services, and Microsoft’s 10-K puts its fiscal 2026 revenue from OpenAI at $24.1 billion), and Microsoft has been building data centers to meet that kind of demand. You can see the build-out in its capital spending over the last five fiscal years…
Capital spending rose every year, from $23.89 billion in fiscal 2022 to $115.95 billion in fiscal 2026, nearly five times as much. The biggest jump came last.
Fiscal 2026 spending was up about 80% from $64.55 billion the year before, an extra $51.4 billion in a single year. Fiscal 2026 alone was more than fiscal 2024 and 2025 combined ($109.03 billion).
…and that spending comes straight out of free cash flow:
Free cash flow peaked at $74.07 billion in fiscal 2024 and has fallen in each of the two years since, to $66.99 billion in fiscal 2026, about 10% below the peak.
Fiscal 2026 is still slightly above fiscal 2022’s $65.15 billion, and over the five years free cash flow has stayed between $59.48 billion and $74.07 billion.
A marked-down stake is a paper loss. Data centers built for a customer that can’t raise money are cash that’s already been spent.
The upshot
My read is that Burry’s post is a wish, and the market doesn’t take requests. Still, he has put his finger on the weak spot. OpenAI’s plan depends on public investors showing up, and a meaningful chunk of Microsoft’s spending plan depends on OpenAI. That’s why Microsoft is exposed, and the bigger risk sits in the capex budget, which can’t be written back.
Of course, a $30 billion round at $1.4 trillion suggests private money hasn’t completely dried up. The IPO window is open today. The question is whether it stays open long enough.
So what is Microsoft stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Microsoft could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
