Zerodha co-founder Nikhil Kamath and Coinbase CEO Brian Armstrong warned that the rising costs of leading AI companies such as OpenAI and Anthropic are facing a major challenge.
The alarm comes amid growing skepticism, with both leaders comparing today’s AI frenzy to the dot-com crash and previous crypto busts.
Why Kamath Can Short an Entire AI Company Today
Speaking on the “People by WTF” podcast, both leaders drew comparisons between recent AI, the 2000s dot-com crash, and the popular crypto markets.
Their shared concern centers on low-cost proprietary models being lost due to low-cost methods.
Kamath took the risk personally, which is how he earns money. He said shorting any private AI company today, it could make him money, in five years, time comparison with the internet bubble.
“Like me, a stock trader, I’m starting to feel that if I took every private company in AI and shorted their stock today, in five years, I could make money… he said.
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Co-founder Zerodha also hopes that the business will diversify. A market dominated by several American giants it will give way to a regional, self-reliant economy built through backward expertise and local development.
Under that concept, individual countries stop importing expensive models and build their own. India runs its own domestic copy, with local tokens and power, enough for everyday use even if it’s not high-end.
“If the world is going in this direction, I don’t see any reason to pay the high fees that these private companies have today,” Zerodha’s co-founder argued.
Is 99% Cheaper Threat Armstrong Explains
Armstrong, in particular, agreed with the market analysis. He also pointed out the huge price gap between the elite frontier labs and the open models that are trailing behind.
Advanced laboratories spend billions to develop the next step. Some opening options, about six months back, reaching the market at a fraction of the cost.
The CEO of Coinbase posted a photo. Open source versions are about six months behind and the cost is less than 99% less, so a large part of the work can be changed to them.
He drew a clear line between the two futures. The Elite Frontier models are important for special projects such as discovering new physics, but the average consumer and business are less interested in the prices.
“It scares me a little when I see this calculation growing so fast. As I’ve seen things like this happen before in crypto. They fix, and then there’s real value underneath, then they grow after that,” said Armstrong.
Once traditional models become cheaper for everyday devices, the business protections that protect AI-based companies may disappear. That erosion is at the heart of the warning.
Armstrong closed his mouth carefully. The rapidly growing valuation makes him nervous, based on a pattern he’s seen in crypto, where prices have been corrected before the actual price was released and then reset afterwards.
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A note Billionaire Investor Just Unveils AI Bet That Could Pay Big in 5 Years appeared for the first time BeInCrypto.
