George Noble, a hedge fund manager and former assistant to legendary Fidelity investor Peter Lynch, is sounding the alarm on OpenAI‘s blockbuster $110 billion fundraise — calling the deal structure “borderline criminal” and warning it “can’t end well.”
Noble posted his analysis on X on Friday, shortly after OpenAI CEO Sam Altman announced the raise from Amazon.com Inc. (NASDAQ:AMZN), Nvidia Corp. (NASDAQ:NVDA) and SoftBank Group Corp. (OTC:SFTBY).
The Numbers Behind the Warning
Noble didn’t mince words on the financials. “OpenAI burned $8 billion in 2025. They project burning $17 billion in 2026. $35 billion in 2027. $47 billion in 2028,” he wrote, adding that cumulative losses before any projected path to profitability exceed $115 billion.
The $840 billion valuation prices the company at 65 times its 2025 revenue of $13 billion — a multiple Noble notes exceeds even Snowflake Inc.‘s (NYSE:SNOW) peak of 50-80 times during the 2021 speculative frenzy. Unlike OpenAI, Snowflake was profitable.
Circular Financing, Not Arm’s-Length Investment
Noble’s sharpest critique targets what he calls vendor financing disguised as venture capital. “Amazon invests $50 billion in OpenAI. OpenAI commits to spending $100 billion on Amazon Web Services. Nvidia invests $30 billion. OpenAI commits to buying 3 gigawatts of Nvidia compute,” he wrote. “Amazon and Nvidia are essentially paying OpenAI to buy their own products.”
Amazon’s $50 billion commitment includes an initial $15 billion outlay, with the remaining $35 billion in the coming months when certain conditions are met.
Lynch Protégé Draws Historical Parallels
Noble, drawing on four and a half decades of market experience, placed the OpenAI raise alongside the dot-com bubble and the 2008 mortgage machine. “When the biggest players start financing each other’s growth through circular investment structures, you’re not witnessing a revolution… You’re watching the LAST PHASE of a credit cycle,” he wrote.
He also cited J.P. Morgan‘s estimate that the AI industry needs $650 billion in annual revenue just to generate a 10% return on total infrastructure buildout — against an industry currently generating a fraction of that.
Noble closed with a pointed question: “At what price does this actually make sense? Sam Altman doesn’t know either — he just keeps raising money faster than he can burn it.”
Photo Courtesy: Meir Chaimowitz via Shutterstock
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