OpenAI Shifts From Market Catalyst to Concern as AI Risks Pile Up

Wall Street’s mood toward the companies fueling the artificial intelligence boom is undergoing a noticeable shift and the narrative now centers on two major players. OpenAI’s glow is dimming, while Alphabet Inc. is stepping into the spotlight.

‍

The company behind ChatGPT is no longer viewed as the unquestioned leader in AI innovation. Investors are increasingly uneasy about its lack of profitability and the enormous capital required to sustain its rapid expansion. At the same time, Google’s parent company is emerging as a financially dominant competitor with reach across nearly every segment of the AI ecosystem.

‍

“OpenAI was seen as the star of the AI story earlier this year, while Alphabet was viewed far more cautiously,” said Brett Ewing, chief market strategist at First Franklin Financial Services. “That enthusiasm toward OpenAI has cooled considerably.”

‍

That shift has triggered heavy selling across companies tied closely to OpenAI including Oracle Corp., CoreWeave Inc., and Advanced Micro Devices Inc. Even Microsoft Corp., Nvidia Corp., and SoftBank, which owns 11% of OpenAI, have felt the pressure. Meanwhile, Alphabet’s rising momentum is lifting not only its own shares but also those of companies linked to its AI efforts, like Broadcom Inc., Lumentum Holdings Inc., Celestica Inc., and TTM Technologies Inc.

‍

The reversal has been both sharp and fast. Weeks ago, anything associated with OpenAI seemed to spark powerful rallies. Now, those same ties are dragging shares lower. Because of OpenAI’s outsized influence on AI-driven market gains over the past three years, this shift carries big implications.

“A spotlight has exposed the complicated financing structures, circular investment deals, and mounting debt,” Ewing said. “While Alphabet’s ecosystem has its own complexities, OpenAI’s setup looks far more extreme and that realization has reshaped investor sentiment.”

‍

A basket of OpenAI-linked companies is still up 74% in 2025 strong, but nowhere near the 146% surge seen in companies tied to Alphabet. For context, the tech-heavy Nasdaq 100 Index is up 22%.

‍

Skepticism toward OpenAI began in August after the mixed reception to GPT-5. Concerns intensified when Alphabet rolled out its newest Gemini AI model to overwhelmingly positive reviews. In response, CEO Sam Altman reportedly issued a “code red,” prioritizing improvements to ChatGPT and putting other initiatives on hold until the flagship product catches up. ‘All the Pieces’

‍

Alphabet’s perceived strength goes far beyond Gemini. It boasts the S&P 500’s third-largest market cap, a massive cash reserve, and a range of adjacent businesses from Google Cloud to a growing semiconductor manufacturing operation. The company also possesses vast AI training data, top-tier talent, and enormous distribution power, plus highly successful subsidiaries like YouTube and Waymo.

‍

“There’s growing conviction that Alphabet has every piece necessary to become the dominant AI model builder,” said Brian Colello, technology equity senior strategist at Morningstar. “A few months ago, many thought OpenAI had already secured that title. Now, the field feels far more competitive and far less certain.”

‍

Neither company responded to requests for comment.

‍

Finishing first or even second has major financial consequences for both firms and their partners. If more users shift from ChatGPT to Gemini, OpenAI could struggle to pay for the cloud services it buys from Oracle or the chips it purchases from AMD.

‍

Alphabet’s partners, meanwhile, are thriving. Lumentum, which supplies optical components for the company’s data centers, has seen its stock more than triple this year. Celestica, which produces hardware for Alphabet’s AI buildout, is up 252% in 2025. Broadcom, the manufacturer of Alphabet’s TPU chips, has gained 68% since late last year.

‍

OpenAI, for its part, has announced a wave of ambitious deals but those same deals have fueled questions about whether the company can realistically fund them. “The pace of its announcements understandably raised concerns about overextension,” Colello said. “Revenue growth timing is unclear, and every step forward by a competitor adds risk to OpenAI’s long-term goals.”

‍

Initially, investors cheered these agreements, hoping they would reveal the next generation of AI winners. With sentiment now shifting, many are adopting a wait-and-see approach.

‍

“When people believed profitability was close, those large deal values seemed feasible,” said Brian Kersmanc, portfolio manager at GQG Partners. “Now investors are questioning rather than assuming.” Kersmanc compares the current AI frenzy to the dot-com bubble “on steroids” and said his firm has moved from overweight to skeptical on tech. Self-Inflicted Wounds

‍

OpenAI hasn’t helped its own case. CFO Sarah Friar recently suggested the U.S. government should “backstop” financing guarantees a comment that drew criticism, though she later clarified the firm hadn’t formally requested such support. Altman also stirred controversy on the “Bg2 Pod” when, asked how the company could justify spending far beyond its revenue, he responded, “If you want to sell your shares, I’ll find you a buyer enough.”

‍

That dismissive tone didn’t land well given that the gap between OpenAI’s revenue and spending plans through 2033 is roughly $207 billion, according to HSBC. Closing it would require higher-than-projected revenue, tighter cost controls, new capital, or additional debt, analyst Nicolas Cote-Colisson wrote in a Nov. 24 note. Even with revenue expected to top $12 billion in 2025, compute costs are “compounding investor concerns” not just for OpenAI, but for the entire AI supply chain.

‍

Still, companies like Oracle and AMD are not wholly dependent on OpenAI. Demand across their broader markets remains strong, and their products have appeal well beyond one customer. Wells Fargo recently noted that stocks tied to ChatGPT are now trading at a discount relative to those linked to Gemini the first such trend since 2016 which could present opportunities.

‍

“I see significant untapped demand across industries, and that will support growth,” said Kieran Osborne, chief investment officer at Mission Wealth. “Monetization is the ultimate target for all these companies, and as long as they continue progressing toward that goal, the investment case remains intact.”

‍