Slow Down for all the Speed Bumps. ARD #106

Today’s theme: “Slow down for the speed bumps” — and Anthropic’s ‘The Blip 2.0’ in particular, the now two-week-old US-government slowdown on Anthropic’s Mythos and Fable models that seems to be spreading to OpenAI. OpenAI and Anthropic may see delays to their mega-AI IPO plans, and the ongoing global memory ‘RAMageddon’ is having greater-than-expected implications for near-term mainstream AI adoption. Three events I’d like to dig into for the AI Tech Wave — each with my Take first, then my Overall Take.

(1) OpenAI Considers Postponing Its Mega-AI IPO Toward 2027

MP TAKE: OpenAI may have to hit the brakes on its rush to a mega-AI IPO this year — the NY Times reports it’s leaning toward waiting until 2027. The drivers are a range of issues, not the least of which is the pacing of its next-generation models released to businesses around the world.

Part of the issue is SpaceX’s retracement since its IPO, from a high of $202 to $153, close to its opening $150 IPO price. Also adding to the uncertainty is OpenAI’s desire to hit a trillion dollar IPO valuation price point relative to its last private valuation of $730 million. And a higher relative private valuation of $850+ million for its sibling arch-rival Anthroopic.

To widen the lens: just days ago the calculus was the opposite — on SpaceX’s record 74-day IPO pace, the talk was whether OpenAI and Anthropic could list before the Fall. A swing from “before the Fall” to “maybe 2027” in a week is itself the speed bump. (For context, OpenAI’s last private valuation was ~$730B vs Anthropic’s ~$800B — and there’s a sibling rivalry around that trillion-dollar IPO mark.)

Sources, in narrative order: NY Times — OpenAI leans toward waiting until next year for its IPO. For longtime readers: ‘OpenAI & Anthropic’s tight IPO clock to match Elon’s SpaceX/xAI’ in AI-RTZ #1125.

(2) OpenAI Gets Drawn Into Anthropic’s ‘The Blip 2.0’

MP TAKE: The US government now seems to be hitting the brakes on how OpenAI can release its next-gen AI models too — The Information reports the administration asked OpenAI to stagger the release of a new model over security concerns — after its knee-jerk reaction to Anthropic’s Mythos and Fable 5 models two Fridays ago. That’s what I’ve called ‘The Blip 2.0,’ after the 3-plus-year-old ‘Blip 1.0’ when OpenAI founder/CEO Sam Altman was fired and rehired over a weekend by its then-nonprofit board.

The government currently seems to be looking for almost a customer-by-customer approval rate to use the latest frontier models — a methodology that would be the epitome of friction in the markets. There are indications this could even extend to OpenAI’s next model, 5.6, closer to the Mythos class. Also unclear: the impact on global demand for US frontier models in light of these unilateral US actions, and the rapid rise of open-source AI models with far greater pricing efficiency than the bleeding-edge frontier models. To widen the lens: layer on the ramped-up AI-coding competition from incumbents — Google, Microsoft, Meta and Elon’s SpaceX/xAI — in the white-hot core AI market for developers and enterprises, and it’s clear how much rides on how ‘The Blip 2.0’ is resolved fundamentally before we get clarity on the real impact on global AI demand. The government, for now, has a yellow flag on the race.

Sources, in narrative order: The Information — Trump administration asks OpenAI to stagger release of new model over security concerns. For longtime readers, in narrative order: ‘Anthropic flagged to a screeching halt globally by the US’ in AI-RTZ #1117; and ‘How Nvidia and Apple can be the global US open-source AI champions vs China’ in AI-RTZ #1089.

(3) World Tech/AI Markets on a Hair-Trigger

MP TAKE: How keyed-up are global markets to the AI trade? A single report of an OpenAI IPO delay was enough to ripple across Asia overnight: SoftBank’s shares tumbled ~10-12% on the news, South Korean stocks fell hard enough to trigger their second trading halt of the week (SK Hynix and Samsung alone are over half the KOSPI, with heavy retail participation), and Kioxia slumped ~12% as AI-related names sold off. Recall SpaceX itself opened at ~$150, ran to ~$202, and has since retraced back near $151 — the same down-draft. When one headline about one company’s IPO timing can trip circuit-breakers on the other side of the world, that’s a market on a hair-trigger.

We saw the upside of this in the ‘Crazy Rich Asian AI markets’ run; this is the down-draft side of the same coin, compounded by the memory-supply squeeze running through the same Asian names. To widen the lens: none of this breaks the long-term AI thesis — but it shows how concentrated and reflexive the AI trade has become, and why “slow down for the speed bumps” is the right posture for now.

Sources, in narrative order: WSJ — South Korean stocks tumble, triggering a second trading halt this week. Bloomberg — SoftBank’s shares tumble after report of OpenAI’s IPO delay. Reuters — Kioxia shares slump 12% as AI-related stocks fall. For context: ‘To rob Peter to pay Paul’. For longtime readers, in narrative order: ‘Crazy Rich Asian AI Markets’ in AI-RTZ #1124; and ‘US hamstrung on memory-chip supply via China’ in AI-RTZ #1128.

MP OVERALL TAKE

It’s ironic that the AI boom is hugely benefiting one part of the AI Tech Wave — the infrastructure and memory side, what I’ve been calling the ‘mainframe AI’ side — while massively taking the oxygen away from the mainstream consumer side of AI. There’s a lot of “rob Peter to pay Paul” going on. What I’ve been calling the ‘local AI’ side is centered around personal computers, smartphones and a wide array of AI devices — all with the memory, GPUs and CPUs to truly run local models, both for inference and reinforcement learning, and ‘unmetered’ if possible. This is the other side of the barbell that’s needed together with the multi-trillions being invested on the mainframe AI side over the next 2-4 years. Right now, we’re heading into a very lop-sided picture of this AI usage spectrum.

On the enterprise/developer side of the market, the US government, for now, seems to be taking its time deciding on the cybersecurity and geopolitical issues around the next-gen ‘super-scale’ (10+ trillion-parameter) AI models from the two key frontier labs, especially — Anthropic and OpenAI. And here’s the rub: a lot of the world’s private and public financial markets have been keyed off the AI-infrastructure investments in the trillions — so any slow-down on the public path of these companies is not yet digested in the markets.

Besides personal devices, remember we’re also talking about physical-world AI like robotics, humanoids and otherwise, as well as AI mobility solutions like self-driving cars heading to level 3 to level 5 soon. All of that needs massive relief from memory and processing supply-chain bottlenecks and price increases. Currently both Tesla and SpaceX trade on optimistic expectations of robot and robotaxis in the physical world by the millions. Something defintely slowed down a lot more than currently discounted in the markets by ‘RAMageddon’ and other AI computing chips and components.

Both digital and physical-world AI ultimately rely on mainstream users — especially early adopters leaning into AI computers, smartphones, devices and gadgets. That’s a market measured in the hundreds of millions and billions of mainstream users. Yet that side of the ‘local AI’ market is being postponed for years — at least until the end of the decade — and that is not discounted into current AI-compute-use expectations. There’s a growing disconnect between the fundamentals and the financial waves driving the AI industry. Worth slowing down for.

Gadget AI — The Unintended Impact of ‘RAMageddon’ on Consumer-Electronics AI

MP Take: The meaningful erosion of the early-adopter, tech-enthusiast end of the AI computing and gadget market has unforeseen implications for the AI and tech markets — and it’s not yet absorbed by investors globally. The Verge puts it bluntly: “RAMageddon just got extremely real.” Remember this isn’t just laptops and phones — it’s humanoid robots, self-driving cars, drones and game consoles, all needing cutting-edge GPUs, CPUs and memory now seeing 20-40% price increases. To widen the lens: the consumer-electronics on-ramp is exactly how AI reaches its next hundreds of millions of users — so when memory prices choke that on-ramp, the cost shows up later, in slower mainstream adoption, not just in today’s pricier devices. Also of concern is the shrinking of the global enthusiast gadget community around local hardware and software — that’s measured in the hundreds of millions, and not easily captured in a financial spreadsheet on Wall Street.

Sources, in narrative order: The Verge — RAMageddon just got extremely real. For longtime readers: ‘Memory Price Hikes Officially Here, with Apple increases’ in ARD #105.

Questions

Q1 — Where does MP see the LEAST impact from ‘RAMageddon’ on ‘local AI’?

Free-tier AI search and agents running on current smartphones and laptops are the relative bright spot — Siri AI (using local, private, secure data on 2-billion-plus Apple devices, launching mainstream this fall) and Google Gemini ‘AI Mode’ in regular Google search, on billions of devices worldwide. They’d be accelerated with newer, higher-RAM hardware, but most of today’s computers and phones can still ramp tens of millions of mainstream users into useful AI right now. Both Apple and Google are in the pole position on the consumer-AI side — their ramps will just be slower than in a normal, prices-falling Moore’s Law environment.

Q2 — Where does MP see the MOST impact near-term?

In the gaming market — console, PC and handheld gaming alike, an early-adopter market of hundreds of millions. Device costs are up 20-30% (Xbox has jumped 30%-plus, toward $800 from $5-600), game development is pulling back as Microsoft rethinks Xbox from the ground up (studio cuts and all), and the ~300-million-plus console-gaming audience will cut back on hardware and games. The deep irony: gaming is the very industry that birthed Nvidia over 33 years into today’s AI company — and it’s the one getting most gut-punched by the AI-infrastructure spending wave. Expect a noticeable retracement in advanced-console/PC/handheld play and in the number of games published.

Full Source Reading —

For the broader context, see the canonical sources for ARD 106 — in today’s narrative order:

Event 1 — OpenAI Considers Postponing Its Mega-AI IPO Toward 2027

• NY Times — OpenAI leans toward waiting until next year for its IPO

• AI-RTZ #1125 — OpenAI & Anthropic’s tight IPO clock to match Elon’s SpaceX/xAI

Event 2 — OpenAI Drawn Into Anthropic’s ‘The Blip 2.0’

• The Information — Trump administration asks OpenAI to stagger release of new model over security concerns

• AI-RTZ #1117 — Anthropic flagged to a screeching halt globally by the US

• AI-RTZ #1089 — How Nvidia and Apple can be the global US open-source AI champions vs China

Event 3 — World Tech/AI Markets on a Hair-Trigger

• WSJ — South Korean stocks tumble, triggering a second trading halt this week

• Bloomberg — SoftBank’s shares tumble after report of OpenAI’s IPO delay

• Reuters — Kioxia shares slump 12% as AI-related stocks fall

• Wikipedia — ‘To rob Peter to pay Paul’

• AI-RTZ #1124 — Crazy Rich Asian AI Markets

• AI-RTZ #1128 — US hamstrung on memory-chip supply via China

Gadget AI — RAMageddon’s Hit to Consumer Electronics

• The Verge — RAMageddon just got extremely real

• ARD #105 — Memory Price Hikes Officially Here, with Apple increases

Shorts Clips from today

Clip 1 — AI’s Impact on Gaming Industry

Watch on YouTube Shorts

Where does MP see the most near-term impact from ‘RAMageddon’? Gaming — consoles, PCs and handhelds. Xbox is up ~30%+ (toward $800), PS5 pricing is rising, and the early-adopter gaming market of hundreds of millions is getting frozen.

MP Take: It’s deeply ironic — gaming is the very industry that birthed Nvidia over 33 years, and now it’s among the hardest gut-punched by the AI-infrastructure spending wave. Expect a real retracement in console/PC/handheld gaming and in the number of games published, as memory costs ripple through.

Clip 2 — AI Boom’s Mainstream Neglect

Watch on YouTube Shorts

The AI boom is hugely benefiting the ‘mainframe AI’ side — infrastructure and memory — while taking the oxygen away from the mainstream consumer ‘local AI’ side: PCs, phones and AI devices that actually run local models.

MP Take: It’s “rob Peter to pay Paul.” That local-AI side is the other half of the barbell needed alongside the multi-trillion mainframe build over 2-4 years — yet it’s being postponed for years, and it’s not discounted into current AI-compute-use expectations. A growing disconnect between fundamentals and the financial waves.

Clip 3 — AI Boom’s Hidden Cost: Consumer Electronics

Watch on YouTube Shorts

‘RAMageddon’ is hitting consumer electronics across computers, laptops and AI gadgets — and into physical-world AI like humanoid robots, self-driving cars and game consoles, all of which need cutting-edge GPUs, CPUs and memory now seeing 20-40% price increases. The Verge: “RAMageddon just got extremely real.”

MP Take: It’s freezing the early-adopter markets — numerically meaningful, in the tens-to-hundreds of millions. The consumer-electronics on-ramp is how AI reaches its next wave of users; choke it and the cost shows up later in slower mainstream adoption, plus a shrinking global enthusiast gadget community that no Wall Street spreadsheet captures.

About AI Ramblings Daily (ARD), and AI-RTZ

Both are daily. Both are free. Both are about AI. But they’re different mediums carrying different messages.

AI-RTZ is the morning text — a deeper written take on one idea, published by at least 5 AM EST. Today: post #1129.

AI Ramblings Daily is the afternoon video + podcast — my ad hoc takes and perspective on the day’s AI issues & news flow, around 20 minutes, with short 1-2 minute clips for quick topic views. Today: episode #106.

Subscribe to either or both on michaelparekh.substack.com. They run as separate Sections you can opt into or out of.

Links used in today’s show (already embedded inline above; listed here for reference)

Take 1 — OpenAI Considers Postponing Its Mega-AI IPO Toward 2027:

• NY Times — OpenAI leans toward waiting until next year for its IPO

• AI-RTZ #1125 — OpenAI & Anthropic’s tight IPO clock to match Elon’s SpaceX/xAI

Take 2 — OpenAI Drawn Into Anthropic’s ‘The Blip 2.0’:

• The Information — Trump administration asks OpenAI to stagger release of new model over security concerns

• AI-RTZ #1117 — Anthropic flagged to a screeching halt globally by the US

• AI-RTZ #1089 — How Nvidia and Apple can be the global US open-source AI champions vs China

Take 3 — World Tech/AI Markets on a Hair-Trigger:

• WSJ — South Korean stocks tumble, triggering a second trading halt this week

• Bloomberg — SoftBank’s shares tumble after report of OpenAI’s IPO delay

• Reuters — Kioxia shares slump 12% as AI-related stocks fall

• Wikipedia — ‘To rob Peter to pay Paul’

• AI-RTZ #1124 — Crazy Rich Asian AI Markets

• AI-RTZ #1128 — US hamstrung on memory-chip supply via China

Gadget AI — RAMageddon’s Hit to Consumer Electronics:

• The Verge — RAMageddon just got extremely real

• ARD #105 — Memory Price Hikes Officially Here, with Apple increases

Q1 + Q2 — MP’s least/most-impacted ‘local AI’ areas under RAMageddon:

• (no external sources — MP’s own analyst view)

Companion text:

• AI-RTZ #1129 — Google in the AI-coding hot-seat vs Anthropic and OpenAI

AI Ramblings Daily on AI-RTZ is here to think through AI and reset. Together.

Today’s AI-RTZ #1129 — Google in the AI-coding hot-seat vs Anthropic and OpenAI — Google is reorganizing its AI-coding strike team to catch Anthropic (now at a ~$47B run-rate, coding-led) and OpenAI, even as it loses star researchers — one of several incumbents (Microsoft, Meta, Elon’s SpaceX/xAI) running hard at the white-hot AI-coding market. Recommended as today’s reading post.

This weekend, look out for the Saturday Weekly Roundup, and Sunday’s ‘Bigger Picture.’ Have a great weekend.

Thanks for joining us today, AI Curious Folk. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here.)

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