Why OpenAI might not want to go public

Economic

Summary:

OpenAI is avoiding going public as it faces massive funding needs and growing scrutiny. Recent remarks about possible government loan support sparked backlash, highlighting pressure around its spending and business model.

OpenAI isn't preparing for a public debut, at least not yet. With complex and seemingly insatiable financial needs, its executives are doubtless content without the obligations, disclosures, and instant quantifiable judgment that come with trading on the open market.

It is doing something in public, however, and at the very least is vying for broad public support as it pitches itself as a national strategic asset that the US government should cherish and protect. And so far, dealing with the public attention from its pitch has been somewhat of an ordeal.

Amid the advocacy, we've already seen a few minor PR snafus seemingly cause major stress for CEO Sam Altman and Co. Leave it to your imagination — or ChatGPT — to paint a picture of what the stress of regular reporting and inspection might do to the ambitious, talented, and financially stretched operation.

On stage at a Wall Street Journal event, OpenAI CFO Sarah Friar said that OpenAI is looking for Washington to provide loan guarantees to the world's largest private company. After a brief backlash, Friar softened her stance in a LinkedIn post, walking back the remarks and clarifying that her use of the word "backstop" muddied the point.

To drive the point home further, Altman gave another C-suite clarification in a lengthy post on X Thursday, again denying his company is looking for a bailout.

So, to recap: OpenAI is now clearly stating it isn't seeking a government backstop for its massive financial commitments.

The reaction to Friar's initial comments and her and Altman's apparent walk-back arrived at a touchy moment for OpenAI. In a podcast released last weekend, Altman was asked by investor Brad Gerstner how his startup could fulfill a pledge to spend more than $1 trillion when it generated roughly $13 billion in revenue this year. Instead of answering, Altman appeared to turn on Gerstner.

"Brad, if you want to sell your shares, I'll find you a buyer," Altman responded. "Enough."

The clip, which has been widely shared online and features Microsoft CEO Satya Nadella laughing through the moment, as if to relieve the tension, hasn't reflected well on Altman.

It's important to note this wasn't an adversarial interview between a working journalist and a tech exec, but a friendly podcast between business leaders with common financial interests. The question, and more basic versions of it, have been bouncing around the AI space for a while. How can AI companies spend so much with so little revenue?

Gerstner's prompt was an invitation to explain OpenAI's business plans. But Altman seemed to take it as an accusation and an attack. Maybe the difficult or unfortunate answer explains Altman's stress. Regardless, for audiences watching and sharing the video online, his defensiveness came off as petty and unwarranted and, more broadly, as a key moment in the backlash against the perceived gluttony of AI companies.

"This will be in the documentary," as one observer put it, summarizing the exchange. For a tech movement that feeds off vibes and dreams rather than tangible profits, this stuff matters.

If OpenAI first got into trouble for taking other people's work, and then taking away people's jobs, the next affront could be taking people's money, leaving the government on the hook if the AI party ends, should the "backstop" question reemerge.

In the same interview, Altman said one of the rare instances he'd want OpenAI to be a public company is to tell his haters to short the stock so he might prove them wrong. Meanwhile, Friar said this week that OpenAI isn't working on an IPO just yet, focusing instead on growth.

OpenAI may not want to be a publicly traded company. But it's seeking guarantees that only American taxpayers can provide.

Source: finance.yahoo

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Daniel Carter

Economic

The preliminary November sentiment index dropped to 50.3, the lowest since June 2022, from 53.6 in the prior month, according to the University of Michigan. That was weaker than all but one estimate in a Bloomberg survey of economists.

A measure of current economic conditions slumped 6.3 points to a record low of 52.3 as anxiety mounted about the impact from the government shutdown. The drop in overall sentiment was broad across age, income and political groups, the report showed.

While spontaneous mentions of high prices increased for a fifth month, inflation expectations eased over the longer term. Consumers saw costs rising at an annual rate of 3.6% over the next five to 10 years, a three-month low. Price expectations for the next year edged up, the data issued Friday showed.

"Consumers perceive pressure on their personal finances from multiple directions," Joanne Hsu, director of the survey, said in a statement. "Consumers also anticipate that labor markets will continue to weaken in the future and expect to be personally affected.''

A measure of current personal finances declined to a six-year low, while buying conditions for big-ticket goods were considered the worst since mid-2022.

Fears about unemployment jumped this month, with 71% of respondents expecting it to rise in the year ahead, more than double the year-ago share.

"Moreover, consumers' expectations over their own probability of job loss worsened this month, reaching the highest reading since March 2025," Hsu said.

On Wednesday, ADP Research Institute reported that US private-sector payrolls rose by 42,000 in October, the first increase in three months. The modest pace of hiring, alongside a series of high-profile layoff announcements from major companies, helps explain why consumers remain pessimistic about the labor market.

The expectations index slid to a six-month low of 49. The longest government shutdown in US history is obscuring the view of the economy as key federal data are delayed. Private-sector sources, including the university's sentiment survey, provide a partial substitute amid the blackout.

The November survey was conducted from Oct. 21 to Nov. 3.

Source: Bloomberg Europe

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Adam

Commodity

A revaluation of the AI sector could raise volatility and trigger another round of deleveraging – impacting gold and other commodities – but any price distortions will be short-lived and won’t impact gold’s strong fundamentals, according to Ole Hansen, head of commodity strategy at Saxo Bank.

“Over recent weeks, the technology sector—especially AI‑linked names—has begun to show signs of fatigue,” Hansen wrote. “An almost parabolic run pushed forward earnings well above long‑term norms, raising the risk of a reset, and the past week has brought the first meaningful wobble. Despite a modest top‑to‑bottom decline of 4.3% in the Nasdaq 100 future—small against a year‑to‑date gain above 20%—the shift in tone is notable.”

He said that the combination of “elevated valuations, narrow market breadth, circularity in AI investment flows, and heavy concentration in a handful of mega‑cap names, alongside warnings from major bank CEOs of a potential 10–20% equity drawdown” has added near-term unease, and warned that an otherwise orderly correction “can become disorderly if too many investors try to exit at once, driving volatility higher and forcing leveraged traders to reduce exposure across the board.”

“Episodes of sharp volatility remain one of the most underestimated transmission channels between equity market stress and commodity price action,” Hansen said. “When a stock-market correction causes volatility to rise abruptly, the knock-on effects can extend far beyond equities. The key reason is mechanical: a large share of institutional portfolios now targets a specific level of volatility or risk. When that volatility jumps, these mandates must cut exposure, and they typically do so across the board, and even positions supported by strong fundamentals are temporarily pulled into the downdraft.”

He said that under many institutional trading strategies, when volatility rises, the amount of allowable leverage falls. “That reduction must be executed regardless of whether the underlying positions are profitable or loss-making,” he noted. “During stress, investors sell what is liquid and sizeable, not necessarily where the risk originated. As a result, the dash-for-cash leaves no position unscathed with the most liquid ones being treated as sources of immediate cash rather than strategic holdings.”

“This is why deleveraging tends to hit every corner of the portfolio simultaneously, including commodities.”

Hansen said that while gold is currently consolidating after its sharp rally, “the market has yet to test levels that would signal a deeper corrective phase or an end to the structural bull trend.” But this doesn’t mean gold can’t see short-term liquidations if volatility spikes.

He pointed to the volatility shock in early April as a clear recent example. “Following a round of surprise U.S. tariff announcements, the CBOE Volatility Index (VIX) almost tripled from around 21% to 60% within three days, while the S&P 500 dropped roughly 15% over the same window,” Hansen noted. “With bond-market volatility also surging, every liquid asset became a candidate for raising cash. Gold fell 6.6% from top to bottom, despite entering the episode with strong bullish momentum. Silver, with its partial dependence on industrial demand, tumbled 17%. Yet both metals recovered rapidly once volatility stabilised. Gold printed fresh highs within a week—an illustration of how quickly fundamentals can reassert themselves once forced flows subside.”

Hansen believes the current equity environment has the potential to trigger another volatility event. “However, with precious and industrial metals—two of the most popular and therefore most exposed sectors—already having undergone a meaningful correction, the risk of a sudden volatility‑driven liquidation shock has eased somewhat,” he said. “Even so, they remain vulnerable to brief, mechanically driven selling but typically recover quickly once the volatility impulse fades.”

“In the near term, the key risk to monitor is a decisive revaluation of the AI complex, which could spill over into broader equity benchmarks, lifting volatility and triggering another round of deleveraging,” he warned. “For commodities, the implication is straightforward: even markets supported by solid fundamentals but carrying elevated speculative length may face temporary downsides driven by forced flows rather than any material shift in their underlying outlook."

“For gold and other investment metals, the core support remain unchanged: fiscal uncertainty, sticky inflation, steady central-bank and investor demand, a gradual drift toward lower real rates, and persistent geopolitical hedging,” Hansen wrote. Meanwhile, industrial metals “continue to benefit from structural demand tied to deglobalisation, electrification, grid expansion and the rapid build-out of data-centre infrastructure spiced with persistent underinvestment in new mine capacity.”

“The message is simple: volatility events temporarily distort price signals across commodities, but they rarely alter the underlying trajectory of markets that enjoy robust macro and micro foundations.”

Source: kitco

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Justin

Economic

Government Shutdown Weighs on U.S. Economy

White House Advisor Kevin Hassett has stated that the U.S. economy recovery will begin as soon as the government reopens. The current government shutdown, which has affected several federal agencies and services, is believed to be dampening economic activity. Hassett emphasized that while the economy remains fundamentally strong, the uncertainty caused by the shutdown is delaying growth and market confidence.

Economists agree that prolonged shutdowns can disrupt both public and private sector operations. Key government data releases, regulatory approvals, and even payroll processing for federal workers are affected, all of which create ripple effects across the economy.

Optimism for a Quick Rebound

Despite the ongoing disruption, Hassett remains optimistic. "As soon as the government reopens, we expect economic indicators to bounce back quickly," he said. This suggests that policymakers believe the current slowdown is temporary and not reflective of deeper structural issues.

The White House is reportedly focusing on resolving the shutdown swiftly to avoid long-term damage. Financial analysts say that investor sentiment is closely tied to political developments, and a resolution could restore momentum in sectors like tech, transportation, and federal contracting.

What This Means for Americans

For everyday Americans, the shutdown means delayed services and economic anxiety. However, if Hassett's forecast holds true, a reopening could lead to increased consumer spending, job activity, and overall confidence in the economy.

The situation underscores the close link between political stability and economic performance. As talks to reopen the government continue, businesses and citizens alike are watching closely for signs of progress.

Source: CryptoSlate

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Samantha Luan

Political

Economic

Several senior Russian officials have gone on the record to warn that NATO is preparing for war.

Russia is accusing NATO of practicing a blockade of the country during recent large-scale exercises in the Baltic Sea, as well as preparing for a conflict with Russia.

Relations between Russia and NATO have deteriorated to an alarming degree following Moscow's decision to launch a full-scale invasion of Ukraine nearly four years ago.

Russia Thinks NATO Is Becoming More Aggressive

Recently, several senior Russian officials have gone on the record to warn that NATO is preparing for war with Russia.

Russian deputy foreign minister Alexander Grushko accused NATO of preparing to blockade Russia through the Baltic Sea.

"During the alliance's exercises, scenarios such as blocking the Kaliningrad region are being practiced. The [Baltic] region is undergoing active militarization, with an influx of coalition forces and resources," the senior Russian official stated.

Kaliningrad is a Russian enclave between Lithuania and Poland. It offers Moscow a second gate to the Baltic Sea. The other point of access is to the north at St. Petersburg.

But the Russian deputy foreign minister was not the only senior Russian official to accuse NATO of preparing to strike.

Sergei Naryshkin, the head of SVR, the Russian foreign intelligence service, also accused NATO of preparing for military operations against Russia.

The chief of the SVR said that NATO is "rapidly mobilizing military resources and shaping public opinion to justify conflict."

"The task has been set to rapidly equip NATO's designated Allied Response Forces with all necessary resources," Naryshkin added.

Russia's head spy said that NATO and the European Union have embarked on a "multiple-fold increase in the production of military equipment," and are also conducting active mobilization training.

Grushko's and Naryshkin's remarks are part of a broader set of accusations directed by Russian officials at NATO.

NATO and the European Union have indeed increased military spending and have engaged in more and larger military drills. But not without reason.

Causation

The Russian officials ignore key cause-and-effect considerations. NATO increased its spending and readiness in response to Russia's full-scale invasion of Ukraine. Motivating countries to spend more on their defense is not easy. It is particularly difficult during peacetime and without an evident threat. It is even more difficult during troublesome economic times after a global pandemic like COVID-19. But Russia succeeded in uniting NATO and Europe with the threat of war and prompted them to invest more in their collective defense and military capabilities.

These senior Russian officials' statements are quite concerning. The Kremlin has a history of preparing the way before engaging in military operations.

For example, before fully invading Ukraine on February 24, 2022, the Kremlin had repeatedly made its case that Ukraine is nominally part of Russia and that Russian-speaking people in Ukraine were suffering under Kyiv's authoritarian control. It later became apparent that the Kremlin was preparing the ground to justify its "special military operation." It could be doing the same again.

The Kremlin knows how to conduct psychological operations and how to shape the information environment in a way to justify its actions. Accusing NATO of warmongering could very well be the spark for more intense competition between Russia and the transatlantic military alliance.

Source: The National Interest

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Adam

Forex

It has been a mixed week for the US dollar, where early-week strength finally eased a little yesterday on indications of softer US jobs data. Yet with the US government shutdown ongoing, we are still in the dark about the true labour market picture. Expect more $ consolidation and focus on regional stories such as soft China trade data and the Canada jobs release

USD: Dollar Rally Stalls

Having been bid for a week, the dollar finally softened yesterday. The catalyst appeared to be some Challenger layoff data and also some alternative data suggesting October’s NFP report, which we were meant to see today, should have fallen by 9k. Short-dated US rates had a sizeable 8bp drop on the day – a development that resonated in FX markets. But on the subject of jobs data, there is no sign of an end to the US government shutdown. It looks like Senators will be meeting over the weekend, however, so let’s see whether there’s any fresh news Monday morning. Betting markets actually attach a 46% probability to the shutdown lasting beyond 16 November.

Where there is jobs data today is in Canada. Consensus is expecting a 5k drop in October after a big 60k increase the previous month. Any downside miss could firm up pricing of another Bank of Canada rate cut and send USD/CAD to the 1.4150/4200 area, which could prove major medium-term resistance. Commodity currencies like the Canadian dollar may also have a soft undertone today after the Chinese October trade data disappointed overnight. Exports fell 1.1% year-on-year and imports barely grew at 1%. That’s not good news for those dependent on industrial demand in China and also a worrying sign for global trade, in that export-dependent economies might not have been able to shake off US tariffs as much as first hoped.

Back to the US, today sees the provisional University of Michigan consumer sentiment number for November. Expectations are for a still healthy 53 reading. And expect continued focus on the frothy Nasdaq, where sharp losses yesterday weighed on the yen crosses. December futures are currently calling the Nasdaq a little higher at today’s open. Additionally, we have a couple of Fed speakers, John Williams and Philip Jefferson, who sit at the dovish end of the spectrum. However, hard data rather than Fed speak looks to be the bigger dollar driver in the near term.

DXY has stalled at the top of the three-month trading range and we expect it to come lower. It’s not clear what will drive lower today, though. And one final point. We had been speculating over the last week whether tightness in US money markets had been contributing to dollar strength. Conditions in money markets seemed to have improved this week, where borrowing at the Fed’s overnight Standing Repo Facility has dropped to zero after the $50bn that was being drawn this time last week. DXY may have topped out near 100.35 on Wednesday. If so, rallies may now stall in the 99.90/100.00 area.

EUR: China Data Is Unwelcome News

While we like the idea of a weaker dollar and a stronger EUR/USD, last night’s Chinese trade data is unwelcome news. It suggests China might not have as easily diversified its exports away from the US as first thought – or at least the ex-US demand is insufficient to offset the loss of the US market. That will only add to fears of increasing Chinese pressure in European markets.

There is a chance that EUR/USD may have established an important low at 1.1470 this week. But for a rally to unfold, we will probably need to get more clarity on the slowing US jobs market. Let’s see whether intra-day support at 1.1500/1510 can now hold.

GBP: December BoE Rate Cut Looks Underpriced

Sterling is enjoying a modest recovery after the Bank of England left rates unchanged yesterday. However, it now seems Governor Andrew Bailey is the swing voter and minded for a December cut. That outcome is only priced with a 70% probability right now, meaning that there is scope for lower short-term rates and a weaker pound. Expect EUR/GBP to find good support if it gets anywhere near the 0.8760 area, and we would expect it to be trading above 0.88 heading into the Budget later this month.

Source:investing

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Warren Takunda

Economic

When Carly Kaprive left a job in Kansas City and moved to Chicago a year ago, she figured it would take three to six months to find a new position. After all, the 32-year old project manager had never been unemployed for longer than three months.

Instead, after 700 applications, she’s still looking, wrapped up in a frustrating and extended job hunt that is much more difficult than when she last looked for work just a couple of years ago. With uncertainty over interest rates, tariffs, immigration, and artificial intelligence roiling much of the economy, some companies she’s interviewed with have abruptly decided not to fill the job at all.

“I have definitely had mid-interview roles be eliminated entirely, that they are not going to move forward with even hiring anybody,” she said.

Kaprive is caught in a historical anomaly: The unemployment rate is low and the economy is still growing, but those out of work face the slowest pace of hiring in more than a decade. Diane Swonk, chief economist at KPMG, calls it a “jobless boom.”

While big corporate layoff announcements typically grab the most attention, it has been the unwillingness of many companies to add workers that has created a more painful job market than the low 4.3% unemployment rate would suggest. It is also more bifurcated: The “low hire, low fire” economy has meant fewer layoffs for those with jobs, while the unemployed struggle to find work.

“It’s like an insider-outsider thing,” Guy Berger, head of research at the Burning Glass Institute said, “where outsiders that need jobs are struggling to get their foot in, even as insiders are insulated by what up until now is a low-layoff environment.”

Several large companies have recently announced tens of thousands of job cuts in the past few weeks, including UPS, Target, and IBM, though Berger said it is too soon to tell whether they signal a turn for the worse in the economy. But a rise in job cuts would be particularly challenging with hiring already so low.

For now, it’s harder than ever to get a clear read on the job market because the government shutdown has cut off the U.S. Department of Labor’s monthly employment reports. The October jobs report was scheduled for release Friday but has been delayed, like the September figures before it. The October report may be less comprehensive when it is released because not all the data may be collected.

Before the shutdown, the Labor Department reported that the hiring rate — the number of people hired in a given month, as a percentage of those employed — fell to 3.2% in August, matching the lowest figure outside the pandemic since March 2013.

Back then, the unemployment rate was a painful 7.5%, as the economy slowly recovered from the job losses from the 2008-2009 Great Recession. That is much higher than August’s 4.3%.

Many of those out of work are skeptical of the current low rate. Brad Mislow, 54, has been mostly unemployed for the past three years after losing a job as an advertising executive in New York City. Now he is substitute teaching to make ends meet.

“It is frustrating to hear that the unemployment rate is low, the economy is great,” he said. “I think there are people in this economy who are basically fighting every day and holding on to pieces of flotsam in the shark-filled waters or, they have no idea what it’s like.” 'No Hire’ Job Market Leaves Unemployed in Limbo as Threats to Economy Multiply_1

'No Hire’ Job Market Leaves Unemployed in Limbo as Threats to Economy Multiply_1

With the government closed, financial markets are paying closer attention to private-sector data, but that is also mixed. On Thursday, the outplacement firm Challenger, Gray & Christmas unnerved investors with a report that announced job cuts surged 175% in October from a year ago.

Yet on Wednesday, payroll processor ADP said that net hiring picked up in October as businesses added 42,000 jobs, after two months of declines. Still, the gain was modest. ADP’s figures are based on anonymous data from the 26 million workers at its client companies.

Separately, Revelio Labs, a workplace analytics company, estimated Thursday that the economy shed 9,000 jobs in October. The Federal Reserve Bank of Chicago estimates that the unemployment rate ticked up to 4.4% last month.

Even when the government was releasing data, economists and officials at the Federal Reserve weren’t sure how healthy the job market was or where it was headed next. A sharp drop in immigration and stepped-up deportations have helped keep the unemployment rate low simply by reducing the supply of workers. The economy doesn’t need to create as many jobs to keep the unemployment rate from rising.

Jerome Powell, chair of the Federal Reserve, has called in a “curious balance” because both the supply of and demand for workers has fallen.

Economists point to many reasons for the hiring slowdown, but most share a common thread: Greater uncertainty from tariffs, the potential impact of artificial intelligence, and now the government shutdown. While investment in data centers to power AI is booming, elevated interest rates have kept many other parts of the economy weak, such as manufacturing and housing.

“The concentration of economic gains (in AI) has left the economy looking better on paper than it feels to most Americans,” Swonk said.

Younger Americans have borne the brunt of the hiring slowdown, but many older workers have also struggled.

Suzanne Elder, 65, is an operations executive with extensive experience in health care, and two years ago the Chicago resident also found work quickly — three months after she left a job, she had three offers. Now she’s been unemployed since April.

She is worried that her age is a challenge, but isn’t letting it hold her back. “I got a job at 63, so I don’t see a reason to not get a job at 65,” she said.

Like many job-hunters, she has been stunned by the impersonal responses from recruiters, often driven by hiring software. She received one email from a company that thanked her for speaking with them, though she never had an interview. Another company that never responded to her resume asked her to fill out a survey about their interaction.

Weak hiring has meant unemployment spells are getting longer, according to government data. More than one-quarter of those out of work have been unemployed for more than six months or longer, a figure that rose sharply in July and August and is up from 21% a year ago.

Swonk said that such increases are unusual outside recessions.

A rising number of the unemployed have also given up on their job searches, according to research by the Federal Reserve Bank of Minneapolis. That also holds down the unemployment rate because people who stop looking aren’t counted as unemployed.

But Kaprive is still sticking with it — she’s taken classes about Amazon’s web services platform to boost her technology skills.

“We can’t be narrow-minded in what we’re willing to take,” she said.