Why Changpeng Zhao Said Most AI Firms Will Go Bust
Binance founder Changpeng Zhao (CZ) argued on Friday that most artificial intelligence (AI) companies will go bust, even as Anthropic closed in on a $1 trillion valuation and OpenAI moved toward its initial public offering (IPO). His warning landed during one of the busiest stretches in AI fundraising history, with two private firms now collectively valued near $1.8 trillion and several smaller startups still struggling to convert heavy spending into profit. CZ Predicts an AI Shakeout Despite Sector Growth Zhao posted on X that AI itself “will stay and grow exponentially,” but said the current crop of AI firms is far too crowded to survive. He added that even the eventual winners will see “huge price fluctuations” and face fresh competition from new entrants. “AI will stay and grow exponentially. But most AI companies will go bust. There are just too many. Even survivors will see huge price fluctuations. There will be new survivor entrants too. Same as any other new industry, really,” CZ posted. CZ framed the situation as a normal pattern in early-stage industries, where a flood of capital tends to produce only a small number of long-term winners. He has previously argued that AI agents need tokens in only a narrow set