Invest Like the Best with Patrick O'Shaughnessy · Tuesday, July 28, 2026
Sam Altman explains that OpenAI's early, seemingly irrational, compute allocation was driven by the conviction that model performance was improving exponentially and that demand for AI would be uncapped if costs could be driven down. He likened AI to a new commodity, similar to early computing, where human ingenuity would find countless uses.
“We could just tell that we were on this exponential of model improvement. That part we were very confident about. We knew it was going to keep going.”
“We were pretty sure, although as you mentioned, we underestimated, that as the models got better and better, if we could continue to drive cost down, that demand for AI at a sufficient, at a sufficiently low price was basically uncapped.”
“This is just like a rare kind of new commodity for the world. But what people would do with it, reminded me of like the early days of computing.”