Binance’s CZ Warns Most AI Firms Will Fail

Changpeng Zhao, founder of Binance, posted on X on Friday that most artificial intelligence startups will fail, even as a few firms attract large funding and high valuations. He warned the field is crowded and that survivors will face wide price swings.

Zhao wrote: “AI will stay and grow exponentially. But most AI companies will go bust. There are just too many. Even survivors will see huge price fluctuations. There will be new survivor entrants too. Same as any other new industry, really.” He has also questioned broad use cases for AI tokens, saying tokens are needed in only a narrow set of cases.

Anthropic announced a $65 billion Series H round at a $965 billion post-money valuation and reported a $47 billion annualized revenue run rate. OpenAI was valued at about $852 billion after a March funding round and is preparing a confidential S-1 with Goldman Sachs and Morgan Stanley, targeting a possible public debut as soon as September. Combined, the two private companies are now valued near $1.8 trillion.

Some corporate users report mixed results. Uber slowed hiring to absorb AI costs, and the company used its full 2026 budget for Anthropic tools within four months, with its technology chief questioning whether higher token use has improved consumer products. A study by the National Bureau of Economic Research found that 90% of surveyed firms reported no measurable AI impact on workplace productivity.

OpenAI has guided for annual losses through at least 2028 and plans substantial datacenter spending. Cloud providers hold roughly $2 trillion in future commitments, with Anthropic and OpenAI representing a large share of that exposure. Anthropic is on track for its first operating profit this quarter, while many smaller AI firms continue to spend more than they earn.

Investors and market participants will watch OpenAI’s S-1 for detailed financials that could clarify the balance sheets of the sector’s largest companies.