Limitless Podcast - OpenAI's Existential Crisis: Are GPT 5.2 and a $1B Disney Deal Enough?

Episode Date: December 16, 2025

Despite the launch of ChatGPT 5.2, there is turmoil at OpenAI, coming amid $20 billion losses and fierce competition from Claude and Google's Gemini. CEO Sam Altman’s "code red" signals urgency, especially with a $1 billion AI content deal with Disney. We discuss user experience concerns, noting only 5% of users are paying subscribers, and the potential impact of ads on retention. Do you still use ChatGPT?------🌌 LIMITLESS HQ: LISTEN & FOLLOW HERE ⬇️https://limitless.bankless.com/https://x.com/LimitlessFT------TIMESTAMPS0:00 OpenAI's Survival Struggles1:34 GPT 5.25:50 Financial Challenges8:38 Billion Dollar Disney9:50 Subscription Models13:56 The Future of OpenAI------RESOURCESJosh: https://x.com/JoshKaleEjaaz: https://x.com/cryptopunk7213------Not financial or tax advice. See our investment disclosures here:https://www.bankless.com/disclosures⁠

OpenAI just shipped GPT 5.2, the new best model in the world. And yet, why does it feel like they're still fighting for survival? 80% of vibe coding is done using Claude Anthropics model, and more people are using Google's Gemini models versus chat GPT. So it begs the question, what's OpenAI even useful for? In fact, this year alone, they're projected to lose $20 billion, and only projecting to be profitable by 2030. That's five years from now. A lot can happen. And on top of all of this, they have a $1.4 trillion bill to pay on compute and data center costs. So whichever way you look at it, the walls seem to be closing in on OpenAI. And Sam is feeling the pressure. He called in a code red two weeks ago, which companies only really do when they're in crisis mode. But all might not be lost. Chad GPT is still the number one AI app in the entire world. And just last week, they signed a $1 billion.

deal with Disney to license their IP to create AI generated video. And rumors are amongst the grapevines right now saying that OpenAI may be IPOing next year at a $1.2 trillion valuation, which will give them the much needed capital that they need to win. Yeah, in 2023 and 2024, the world was basically like, chat GPT equals AI. If you're using AI, you're using chat GPT. In fact, most people off the street, if you ask them what AI was, they would tell you it's chat GPT. There is a complete and total domination of the marketplace by this company.

Up until this year, this year, the question has become not chat GPT to SQL AI, but like, which AI do I use for which task? There's not one AI that does everything anymore because they've kind of siloed themselves into these individual buckets where if you want to write code, you don't go to chat GPT, you go to Anthropic. If you want to create images, you go to Google. And chat GPT is no longer the all in one app. It's a place where you go to solve a specific set of problems and like sticking with the war analogy because this is the Game of Thrones. It's like Open AI used to have the only aircraft carrier in town. Everyone had to come through them to use them, but now everyone has an aircraft carrier. And the differentiator really becomes like supply chains,

alliances, distribution, and your ability to build applications that create actual value for users like us who want to use them. So that takes us to, I guess, 5.2, which is what we're going to talk about today that Open AI just recently launched. And it should give us some hints as to where the company is going as they try to fight this resisting force that's closing in around them from all ends. Yeah. So the resisting force comes in the form of Google's Gemini 3 Pro, which released two weeks ago, and then Anthropics Claude Opus 4.5, which is the frontier model when it comes to coding. So really, when opening I released this model, people were looking at these two competitors and seeing how it weighed up against it. And the answer, Josh, is really, really well. It

technically beats Claude Opus 4.5 encoding and it beats Gemini 3 Pro against a range of different generalized AI activities. So technically, I think it is the best or number one model in the world. And the reason why I'm kind of like a little uncertain about this is I just feel like, to your point, they're gamifying towards benchmarks that don't really matter or don't really apply to the real world. But there is one particular benchmark that I thought was really cool that it excelled in, which was GDP Val, which basically measures how. GBT 5.2 performs in real world expert level tasks. So I'm talking about things that people do in work that professionalize in their work. And it was measured that in 70% of cases, Josh, human experts

would choose GPD 5.2's output and answer and the way that it deals with that particular task versus an expert professional human that's paid hundreds of thousands of dollars a year, which kind of blew my mind. And that was the most valuable kind of takeaway with GPD D5.2. So chat GPT feels like it's stuck between a rock and a hard place where they're optimizing for these vanity metrics, but the actual day-to-day experience for a lot of users like myself and you are just not really changing much. The product has mostly stayed the same. The models are getting better, but the only difference that I notice is that the tick in the little top left corner goes from 5.0 to 5.1 and now it says 5.2. But in terms of the actual outputs, in terms of my

experience using the platform, not a whole lot has changed. In addition to this, they have tweaked the cost a little bit, which is pretty pricey. It's $21 per million tokens in $168 per million tokens out. So you're paying for a frontier model for sure. And this is probably a result of them just using a tremendous amount of compute to optimize for these benchmarks, which is bizarre because Sam Malman came out and said, this is a 390x cost reduction in a year, which is pretty remarkable. And you really have to take a step back and appreciate what they've been doing. Because a lot of the sentiment around Open AI right now is fairly bearish in the sense that they have a lot of hard challenges they need to overcome in order to make this whole thing work. But a 390 times cost reduction in anything

in a year is pretty remarkable. And that's relative to, I believe, 03, which was, if you could believe this, it was released a year ago, which feels like an eternity ago. But it was literally not even 12 months ago. And since then we've gotten, I mean, you could look at this archaGI chart, which is the benchmark that kind of everyone uses to gauge where these companies are on the path to AGI, they've made such an incredible improvement. And that token that used to cost a dollar now cost what is one four hundredth of a dollar, whatever that is, just a fraction of the cost. And these, I mean, these changes are remarkable. So even though we're being particularly bearish on Open AI, you do have to admire the fact that this industry is advancing so quickly. And what cost

$400 yesterday now cost $1 today for something that is far higher quality. All of that being said, Josh, I am not entirely sure that models are kind of like the thing to optimize for, at least from a benchmark's perspective. I think that open air should be focused on one thing and one thing only that they do really well, which is the consumer product mode. And we have a deal based on this that has come into play over the last week, which is the Disney deal, the $1 billion deal that they inked with Disney in order to hopefully, I guess, make a little bit more of a mainstream splash. I guess the way you could describe it is if you can like imagine Disney as a sneaker brand and Sora is the machine that could generate these unlimited custom shoes.

Until now people were basically making these fake nikes. And this is a big problem. There's a lot of these fake products that are reflective of the real thing, but lack in the quality, they're messy, they're legally very sketchy. And then Disney is finally coming and they're kind of capitulate. And they're like, okay, we're going to officially license the designs, but we're going to set the rules. And we're going to make sure that we get paid so our brand doesn't get wrecked. So this is very much feels to me like a hedge against the destruction that was already starting. So now fans can go and they could generate short videos using Disney characters or Marvel, Star Wars, whatever it is. And then Disney gets the opportunity to skin that the way they like, put the guardrails in place. And then

Disney also even offers plans to stream curated clips on Disney Plus. So they're actually integrating this into their ecosystem. So what you're seeing here? And it is really funny. It's like they're letting you play with the characters, but not steal the actor's identity. And this feels like a 180 from where they've stood previously because from what I understand, they're simultaneously suing Google over like copyright infringement stuff. So they're saying, no, no, no, no. If we're going to play this game, we're going to play this on our terms.

And they committed at least a billion dollars to open AI to form this relationship and to start doing it. And to me, it feels interesting. And on the screen, we have a bear case too, where it seems like they have just totally capitulated. Yeah. Effectively, what's being described here is, you know, Disney, in his own words, Disney is a $200 billion company sitting on only $5 billion worth of cash,

and a $1 billion investment at a $500 billion valuation of Open AI doesn't matter to them at all on the upside case. And so if Open AI is going to IPO at a $1 trillion valuation, that's just a 2x. So it doesn't make any kind of meaningful dent or impact on Disney's profit line. Where I think the real value is coming in here, Josh, is long term if you can have endless amounts of content generation for Disney's IP without Disney needing to spend money

on really expensive animators and teams to produce the content. And, you know, animation takes like years to produce. Open AI can generate it in a couple of minutes. That is, it's kind of like free marketing. It's kind of like free PR. And the fans can make of it what they will without kind of Disney having to get their hands dirty. So it kind of makes their IP endless.

And if Disney ends up owning all of it, then great. And in fact, as part of this deal, if I'm not mistaken, Open AI gets exclusive rights on the IP for a full year before Disney kind of reclaims IP access or IP licensing on the AI generated content. So they really see that Open AI has some kind of advantage here and they were able to strike a pretty sick deal. Yeah, and the big boundary line is you can use the characters,

but not the real performers' faces or voices. So for me, this is exciting because, I mean, imagine you were a kid. I always watched Disney Channel. I loved Disney Channel. And there's a world in which you start to get. a custom curated Disney channel just for you, where you have the characters, you have a universe, but it's all hyper-tailored to the stuff that you are most interested in. And that seems exciting. It seems directionally correct in the sense that we're going to start leaning more into

hyper-custom content per person. And Disney's kind of leaning into that. So props to them, but that doesn't end our AI, our open-AI concerns for this week. There is more. So as we were going through the financials, we started to look at them and they're losing, lots of money. How much specifically he does? 20 billion dollars, Josh. 20 billion dollars. Yeah.

Okay, so we got one billion from Disney. So yeah, they're exactly. One 20th the way there. Right. Exactly. And okay, to give them a few flowers, $13 billion annual recurring revenue is great, right? But they're projected to be spending twice,

if not three times that amount of money next year on data center costs alone, Josh. So then you might be like, well, they have paid subscribers, right? So they should be fine. Well, 5% of the 800 million weekly active users that they have actually pay. So that's 40 million. And of that percentage, I guess quite a large percentage of them are only the 20 bucks a month subscribers. So the point I'm trying to make here is the subscription model for Open AI does not make sense. In a world where it needs to make sense, I would guess they need to turn on advertisements.

As soon as they do that, in my opinion, it's going to make the product experience, even worse, which will push people towards or back towards Google and Claude to kind of use their models for free. And Google has an endless amount of cash flow so that they don't really care about this, right? Another crazy number is how much of their revenue they're losing to Anthropic. This year, Anthropic unseated them as the top enterprise AI model that is favored by enterprises globally, a crown which Open AI held for like a number of years prior to this. So they're losing on that front as well. And then when it comes to you. to just like generally projecting their revenue, Josh, something that a number that they've

floated is, you know, by 2030 we'll have $200 billion worth of revenue. But what people aren't contemplating is how much they're still measured to be losing in that same year, which is around the same amount, if not a little bit more. And of course, like these bar charts and stuff are all just estimates. No one knows how this will actually end up transpiring. But it's, it's worthy to think about. But the final one is the $1.4 trillion worth of compute that they're projected to spend over the next five years. And I actually want to come in here with a positive note, Josh, because this is the biggest kind of debt on their balance sheet that people kind of like bear about, right? They're saying like, hey, this is a really bad thing.

Open air is not going to be worth a lot of money because of this. It's just a number. And it's just a clickbait number because it's not real. If you look into the contracts and the terms that they've signed with all these cloud providers, they don't actually need to spend this amount. of money. It's just the most amount of money that they could potentially spend with these cloud providers, with these compute providers. So realistically, if you look at the contractual deals for next year, opening eye just needs to spend up to $10 billion, which is a lot more feasible than the $100 billion, which is contractually apparently or headlined to be for next year. So there's a bit of fearmongering on social media about all of this stuff. And I actually don't think the bear case is all that

big full open eye. In fact, I think it's quite bullish. Yeah, here's the thing. It's like with episodes like this, it's fun to talk about the drama. It's fun to talk about the downswings. These are subtle nuance changes that are happening on a much longer, smoother trajectory, which is up into the right. And the reality is that open AI is one of the most remarkable companies on earth. They are shipping the best AI in the world. And it's, it's fun to nitpick. It's fun to pick at the headlines. But the reality is that these companies are printing tons of cash. They're spending more, so there are real concerns, but directionally, what we're seeing is this unbelievable progress, like 930 times cost reduction for a leading edge token over 12 months

is so huge, especially considering that is one of many compounding factors. There's the cost per token, but there's also the quality per token, and there's the cost per GPU, which has gone much lower, and there's the product now that is significantly better than it was a year ago. And we're getting all of these compounding growth things that I'm watching this funny video on the screen. What is this? Is this from Sora? It shows you, yeah, it just shows you what they're good at, Josh. Like it puts a smile on your face.

People actually want to use and consume these products. And I feel like people are focused too much on the benchmarks. They focus too much on the numbers. But the fact is, if people want to use your product, you'll end up being a pretty successful company. You're watching this really funny video of a snowman snowboarding. And this was not possible even a year ago because video generation has gotten much better. And just last week, three days ago, actually, it was Open AI's 10-year anniversary. They've been around for a decade, which is pretty amazing because up until when, 2021, AI didn't even really exist in the consumer marketplace. So for six of those 10 years, nobody cared about Open AI. And then they released Chat GPT, 3.0, and that was the firing gun. And the race started. And now in the next four years, the world has changed forever. And Open AI is very much responsible for that. Google had designed the transformer. They had the architecture, they did nothing with it for a really long time until Open AI came around and

started the race and is now leading the race and will continue to be a prominent player. Where they stand on the scale of things, I don't know. Their 90% of the pie they had is certainly going to go down. But even if it drops down to 30%, 30% of this pie is an enormous number. And it leaves me just feeling excited and optimistic. I mean, the other wildcard too is that they have the hardware device incoming. And no one else is really building a dedicated hardware device with the world-class hardware designer. So that leaves something really excited to look forward to next year. But I think in terms of progress for this year, Open AI had an unbelievable year. And it's easy to talk down on it because relative to others, yeah, sure, they're losing some market share. But man, what a great

company. What a great model. And that's our episode for today, folks. A lot of you have been commenting about giving our opinion on Open AI, the bull case, the bear case. And the fact that a lot of these AI companies are going public next year, you know, a lot of you from the investing angle are curious, we will continue to be putting out our thoughts and opinions and putting out the facts as much as we can. We hope you enjoyed today's episode. If you enjoyed it and if you enjoyed all about other episodes, we put out three or four maybe even last week, Josh. Go check them out, subscribe, put on notifications. Give us a thumbs up. Give us a rating if you enjoy our content and we will see you on the next one. See you guys.