Mark Cuban sounds alarm over OpenAI's AI spending, ‘trillion dollars spent just to be an app’

Mark Cuban has joined the growing list of sceptics questioning the AI spending boom, arguing that OpenAI is overspending on infrastructure with little certainty of earning adequate returns. The billionaire investor believes the ChatGPT maker's ambitious trillion-dollar investment plan could backfire for two key reasons.

Companies are spending aggressively to pursue AI leadership, despite doubts that the investments will deliver the expected rewards, Cuban said, pointing out that OpenAI is at the top of the list and is definitely overspending.

OpenAI raised $110 billion in its latest funding round, roughly three times the size of the largest IPO in history. The company is planning to spend $1 trillion on infrastructure over the coming years.

“They'll never get it. They're just sh**ting away that money,” he said during an interview at the Big Technology Podcast. Here are the two key reasons why he believes OpenAI's ambitious spending could ultimately backfire.

First, it is a grave concern whether OpenAI can generate enough profit to justify the massive spending.

“There’s a lot of FUD being put out about the AI spending,” Cuban said. “We’re going to spend a trillion dollars because we need all this data centre capacity.”

Cuban argues the math doesn't add up. Computing power will get cheaper as technology evolves, which means companies spending billions today could end up with expensive infrastructure that loses value much sooner than they expect.

“The ability to process is going to get faster and cheaper. And it's going to happen faster and quicker than people expect,” he said and also added, “I think a lot of the numbers that they're throwing out there aren't going to come to fruition.”

Earlier this month, AI critic and researcher Ed Zitron also pointed out that “if OpenAI fails, it will be because LLM models are unprofitable.” They spend heavily on AI infrastructure, while their subscription business and advertising revenue do not cover those costs.

Second, Cuban also believes it's too early to assume OpenAI will justify its trillion-dollar valuation. The AI market is still taking shape, and it's far from clear who the long-term winners will be.

"We don't know if the business of foundational models — ChatGPT, Gemini, Grok, Claude — is going to be like the streaming industry, where there's one leader and a bunch of players that make money, or like search, where there's effectively one company," he said.

If you go all-in and don't win, "you just spent a trillion dollars to be an app."

Earlier this week, JP Morgan CEO Jamie Dimon also asserted that AI spending will eventually pay off, but not in the way we expect.

Pointing at previous trends, he said that during the internet boom, big early players such as Yahoo and Netscape faded while eventual winners such as Google and Facebook emerged later. “Will it pay off the way you expect and the timetable you expect? Definitely not,” Dimon said.

Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of internat...