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Taco Bell/OpenAI logos
(Bronson Stamp for Sherwood Media)

OpenAI is Taco Bell

A California-born company built on the steady repurposing of old ingredients, promising transcendence.

Adam Chandler

Going at least as far back as 1998, when The Onion published a piece headlined “Taco Bell’s Five Ingredients Combined In Totally New Way,” people have feasted on the idea that there was no better known (or more shameless) practitioner of repurposing of preexisting material than Taco Bell. The Mexican Pizza, the Double Decker Taco, the Crunchwrap — these are all iconic dishes that, while created in a lab and marketed euphorically as new and revolutionary for humanity, were really just fashioned from the beautiful slop of old. (Not that any of us complained!)  

But now another California startup is here to steal its thunder. Investors, boosters, speculators, and fans may fawn over the life-changing promise of OpenAI, but it’s really not doing much more than what Taco Bell did first. What are Nacho Fries and Doritos Locos Tacos but text-to-image concepts that you can actually eat? Like the Bell, which distinguished itself early through its social media and mobile ordering, OpenAI has collected its laurels as a technological pioneer with the assistance of no small amount of marketing furor. Even as futurists wring their hands about the AI-fueled dystopia ahead, anyone who’s seen “Demolition Man” knows that a market ruled by Taco Bell has been the stuff of nightmares for 30 years now. You could even argue that Taco Bell’s longtime slogans, “Yo Quiero Taco Bell” and “Live Más,” were early incarnations of a large language model, given their innovative use of Spanglish.

The similarities don’t end there. Like OpenAI, Taco Bell also had its early days of innocence, operating as an independent entity in a progressive new field. Its promise spurred imitators and competitors (Del Taco, Taco John’s, and eventually Chipotle) and, after some exciting years, was bought by PepsiCo in 1978 for an eye-popping $125 million, roughly $650 million in today’s market. After its acquisition, Yum! Brands’ Taco Bell began to operate much in the way that OpenAI has in its partnership with Microsoft: inelegantly sharing space and resources with decidedly less sexy brands (KFC and Pizza Hut) and tragically requiring Pepsi products at its fountains, a tribute tax to the gods of vertical integration. Even as we may still love Taco Bell, we know it could be better and, accordingly, regularly call to restore its former glories

So where will OpenAI go from here? Look to the Bell, friends. After all the froth and hype of infancy, OpenAI has followed Taco Bell by settling into its bland place at the adult table, subject to the same petty beefs, wild conspiracies, shameless back-scratching, and insatiable thirst for capital that typify the world of big business. One day, not long from now, we’ll find ourselves nostalgic for the OpenAI of yore.    

Ultimately, there is truly nothing new under the California sun. A company promising enlightenment and transcendence, built on borrowed intellectual property? Taco Bell did it first, baby. And like Taco Bell, OpenAI will flourish because there’s money there, there’s hunger for it, and people are way too lazy or overworked to cook things up themselves anymore. OpenAI won’t be the biggest thing in its market category, like Coca-Cola or McDonald’s, but, like Taco Bell, it will be a household name, which is no small thing — especially in an industry built on chips.

Read the other arguments for OpenAI's future here.


Adam Chandler is a journalist in New York and the author of “Drive-Thru Dreams.” His next book, “99% Perspiration,” will be published in January.

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Ives says he’s “relatively disappointed” in the price point of lower-cost Tesla models

On Tuesday, Tesla unveiled its long-awaited lower-cost cars, which turned out to be downgraded versions of the existing Model Y and Model 3. Tesla bull and Wedbush Securities analyst Dan Ives wasn’t particularly impressed with the price point, noting that it’s “still relatively high versus other vehicles on the market.”

The Model Y Standard and Model 3 Standard cost about $40,000 and $37,000, respectively. That’s more than the Model Y Premium and Model 3 Premium — what previous editions (or “trim levels”) are now called — cost last month, before the US federal government’s $7,500 tax credit expired. And the Standard models are missing a lot of Premium features, including Autopilot, second-row screens, and Tesla’s iconic glass roofs, among numerous other downgrades.

In other words, Tesla buyers will now be paying more for less, in what amounts to car-sized shrinkflation.

The stock closed down 4.5% yesterday on the news.

Ives doesn’t think it’s the end of the world but is “disappointed” in the price tag:

“We believe the launch of a lower cost model represents the first step to getting back to a ~500k quarterly delivery run-rate which will be important to stimulate demand for its fleet with the EV tax credit expiring at the end of September but we are relatively disappointed with this launch as the price point is only $5k lower than prior Model 3’s and Y’s.”

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Nvidia helps boost xAI funding round to $20 billion

xAI’s latest funding round has now doubled to $20 billion from $10 billion a month ago, thanks in part to backing from Nvidia, which invested $2 billion in the equity portion of the transaction, Bloomberg reports. In an interview with CNBC, Nvidia CEO Jensen Huang confirmed the investment, adding that his “only regret” was that he didn’t give xAI more money.

The mix of $7.5 billion in equity and $12.5 billion in debt will finance a special purpose vehicle that will purchase Nvidia chips that xAI will then rent. It’s one of many circular AI deals these days that’s contributing to chatter over an AI bubble by some, while being seen by others as a rational way for industry leaders to boost the potential size of the addressable market and lift their longer-term prospects in the process.

Investors in Elon Musk’s other company, Tesla, will vote next month at the company’s annual shareholder meeting on whether to invest in xAI as well — an outcome Musk has he said supports.

The mix of $7.5 billion in equity and $12.5 billion in debt will finance a special purpose vehicle that will purchase Nvidia chips that xAI will then rent. It’s one of many circular AI deals these days that’s contributing to chatter over an AI bubble by some, while being seen by others as a rational way for industry leaders to boost the potential size of the addressable market and lift their longer-term prospects in the process.

Investors in Elon Musk’s other company, Tesla, will vote next month at the company’s annual shareholder meeting on whether to invest in xAI as well — an outcome Musk has he said supports.

$1T

In the past few weeks, OpenAI has announced a flurry of massive deals with Oracle, Nvidia, CoreWeave, AMD, and others as hundreds of billions fly between technology partners racing to expand AI infrastructure at unprecedented scale. The Financial Times tallied it all up and found that the company has signed about $1 trillion worth of deals, and it isn’t clear at all that it will be able to fund them.

The “circular” nature of some of these arrangements is also one factor playing into fears that we’re in an AI bubble.

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Tesla abandoned plans to make thousands of Optimus robots this year

At the start of this year, Tesla CEO Elon Musk said on an earnings call that his company planned to build 10,000 Optimus robots for internal use in 2025. On that same call, he hedged and said he thought the company would definitely build “several thousand” of the bots and that they would “be doing useful things by the end of the year.” Tesla apparently abandoned those plans this summer, according to new reporting from The Information, amid “difficulty Tesla has had with the hands for the robots” and other problems.

The importance of Optimus to Tesla has skyrocketed as sales of the company’s EVs have fallen. Last month, Musk said Optimus would some day amount to 80% of the value of Tesla.

Musk, who has been continually sharing videos of Optimus on X, reportedly hopes to impress investors next month at the company’s annual shareholder meeting with a “dancing troupe of Optimus bots.”

The importance of Optimus to Tesla has skyrocketed as sales of the company’s EVs have fallen. Last month, Musk said Optimus would some day amount to 80% of the value of Tesla.

Musk, who has been continually sharing videos of Optimus on X, reportedly hopes to impress investors next month at the company’s annual shareholder meeting with a “dancing troupe of Optimus bots.”

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