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Today’s Menu

• OpenAI seeks historic funding at $300B valuation

• Hyperliquid's close call exposes crypto trading vulnerabilities

Markets

TODAY IN AI

OpenAI seeks historic funding at $300B valuation

OpenAI is reportedly closing in on a massive $40 billion funding round led by SoftBank, positioning it to become the largest private funding in history. This deal would nearly double the ChatGPT maker's valuation to an eye-watering $300 billion.

SoftBank plans to invest $7.5 billion initially, followed by another $22.5 billion later this year. Other investors joining the round include Magnetar Capital, Coatue, and Founders Fund, highlighting the continued confidence in AI's growth trajectory despite current market conditions.

The financial details reveal both ambition and burn rate. OpenAI expects its revenue to triple to $12.7 billion in 2025, while projecting over $125 billion in revenue by 2029, when it aims to become cash-flow positive. These projections come despite the company reportedly losing up to $5 billion on $3.7 billion in revenue during 2024, primarily due to AI infrastructure and training costs.

A portion of this funding will support OpenAI's commitment to Stargate, the $300 billion AI infrastructure joint venture with SoftBank and Oracle announced earlier this year.

What this means for the market: OpenAI's fundraising validates that the AI boom remains in full swing despite the enormous costs involved. While competition intensifies across the board, OpenAI maintains unparalleled mindshare in the AI ecosystem - and investors are betting big on its long-term dominance.

^{Today In Crypto}

Hyperliquid's close call exposes crypto trading vulnerabilities

A trader recently executed a brilliant but dangerous scheme that nearly broke Hyperliquid, exposing critical vulnerabilities in decentralized perpetual futures protocols.

The exploiter opened a massive $6 million short position on Jelly-My-Jelly ($JELLYJELLY.X), a token with just $20 million market cap. Simultaneously, they purchased spot tokens to drive up the price, intentionally trying to liquidate their own leveraged short position.

Why liquidate yourself? Because on Hyperliquid, large liquidations on illiquid tokens force the Hyperliquid Vault to assume the position. The strategy worked perfectly - Hyperliquid's protocol was forced to take on a $5 million short position on $JELLYJELLY.

The situation worsened when Binance and OKX suddenly listed $JELLYJELLY, sending its price soaring 522% in a single hour. This left Hyperliquid holding a rapidly deteriorating short position with no clear exit strategy.

Hyperliquid ultimately saved itself by delisting $JELLYJELLY perpetual contracts and force-settling all positions at the original price of $0.0095. While this protected the protocol, it revealed a fundamental contradiction: these systems are "decentralized" until something goes wrong, at which point centralized intervention becomes necessary.

The market lesson is clear: decentralized finance protocols still harbor significant structural vulnerabilities, especially when dealing with illiquid assets. The entire episode serves as a reminder that in crypto trading, the most dangerous threats often come from exploiting legitimate protocol functions rather than traditional hacking.

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Thanks for reading!

Until next time,

Damon James