OpenAI CEO Sam Altman pictured on February 3, 2025. Ex-Fidelity manager George Noble says the AI researcher is “falling apart in real time.”
Bearing the brunt of Tuesday’s steep 2% retreat in the S&P 500 was tech, as the Magnificent 7 shed a collective $683 billion in market cap, according to Dow Jones Market Data.
Our call of the day from ex-Fidelity manager George Noble warns of an “astronomical” risk profile from adjacent investment plays to AI researcher and developer OpenAI.
Flagging his post on X was “The Big Short’s” Michael Burry, a steady critic of the AI boom who shot to fame for accurately calling the housing bust. “This is not surprising and will not end with OpenAI,” he said of Noble’s post.
A respected Wall Street veteran, Noble’s career began in the early 1980s at Fidelity, where he worked alongside legendary investor Peter Lynch and ran the company’s first international fund, the Fidelity Overseas Fund FOSFX, which was the No. 1 fund in the U.S. for several years. He also launched two billion-dollar hedge funds.
Noble’s Monday post – “OPENAI IS FALLING APART IN REAL TIME” (yes, all caps) – is a rundown of the warning signs he sees over OpenAI, such as rising competition and falling traffic for ChatGPT. He also flags its heavy losses, quoting Deutsche Bank estimates that the company would see $143 billion in cumulative negative cash flow before turning a profit.
“I’ve watched companies implode for decades. This one has all the warning signs,” he wrote.
Noble said there’s been little discussion of the vast energy needed to keep these AI companies going, saying it will cost five times the energy and money to make models two times better.
“The low-hanging fruit is gone. Every incremental improvement now requires exponentially more computer, more data centers, more power,” said Noble. Add to that its failures with GPT-5, a “talent exodus,” and then a lawsuit by Elon Musk, he said.
“Here’s what I think happens next: The AI hype cycle is peaking. The diminishing returns are becoming impossible to hide. Competitors are catching up,” he said.
“OpenAI needs to generate $200 billion in annual revenue by 2030 to justify their projections. That’s 15x growth in five years while costs keep exploding,” said Noble.
He sees high risk in AI adjacent plays, warning that valuations are way too elevated. “If you’re exposed to the Magnificent 7 through AI infrastructure bets, consider trimming. The gap between promised revolution and delivered reality has never been wider,” he says.
“The smart money is rotating into sectors where valuations actually reflect fundamentals. Small and midcaps are trading near decade lows relative to Big Tech while earnings growth is only marginally lower,” he said. “Markets can price risk, but they can’t price chaos.”
Echoing concerns by others over the U.S.-Greenland feud, Noble wrote in a separate post on X that Big Tech is in trouble if Europe rolls out its Anti-Coercion Instrument or “trade bazooka.”
“$108 billion in counter-tariffs. Plus restrictions on U.S. services, procurement access, regulatory approvals, and IP protections. This hits Big Tech, financial services, and the digital economy where U.S. dominance actually lives,” he said.
“Smart money is repositioning: Trimming U.S. large-caps. Adding gold and silver. Building positions that don’t require transatlantic trade stability. Again: NOT because Greenland matters… But because when foreign policy becomes a domestic political release valve, and trade partners respond with credibility wars instead of negotiations, you’re in uncharted territory,” he said.
In May 2024, Noble told Fox News that gold was a “suitable replacement for bonds,” because the U.S. was “spending money like drunken sailors.” He flagged SPDR Gold Shares GLD and VanEck Gold Miners ETF GDX at the time as inflation hedges.
In a separate interview in May 2025, he discussed his bearish view on Mag 7 stocks, which would go on to rally
The markets
U.S. stock futures (ES00) (YM00) (NQ00) were steady. Gold (GC00) pushed higher, while oil (CL00) was lower.
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The buzz
President Donald Trump will speak at the World Economic Forum at 10:30 a.m. Eastern, later than initially scheduled, due to a flight delay.
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