Episode summary
Henry Blodget on the Software Selloff Hysteria and the Problem for OpenAI | Odd Lots
Odd Lots
· · Hosts: Joe Weisenthal, Tracy Alloway · Guests: Henry Blodget
Summary
Henry Blodget argued that the AI trade is still in an early, highly uncertain phase, closer to the 1990s internet than a mature platform cycle. He said markets are swinging between euphoria and doomerism because small changes in assumptions radically change present values, and he thinks the recent selloff in software stocks reflects rising risk aversion more than a fundamental end-times case for enterprise software.
He pushed back hard on the idea that AI will simply erase software and jobs. Blodget said software companies are not going away, companies outside software will not suddenly build their own systems with a junior person and a chatbot, and the bigger historical lesson is that disruptive technology usually creates new work even as it destroys old work. At the same time, he said the real risk may be agentic AI that causes damage in the world rather than mass unemployment.
On OpenAI, he was skeptical that the company can justify its rising valuation or become the era’s Google. He argued that switching costs and network effects are weaker than in search, that Google has already caught up in some cases, and that OpenAI’s economics look brutal because it must raise huge amounts of capital while Big Tech generates cash flow internally. He also said the private market around AI is getting crowded, euphoric, and expensive.
Key takeaways
- Blodget said the market is pricing AI with extreme uncertainty, so valuations can swing quickly from euphoria to panic.
- He argued the software-doom thesis is hysteria because enterprise software is sticky and companies still need accountable vendors.
- He said OpenAI’s current economics are “incredibly difficult,” especially because it must raise capital externally while rivals self-fund.
- Blodget thinks the bigger AI risk is an agentic system causing real-world damage, not a total collapse in human employment.
- He believes media brands and niche experts will remain valuable, but only if they differentiate and serve direct subscribers.
Notable quotes
“We are early in the development of the industry. This looks a lot like the internet in the 1990s for those of you who remember”
“Software companies are not going away. Companies that are not in the software business are not going to suddenly say, "Oh, let's have a junior person who understands AI build all our software for us”
“the bigger risk with AI is actually that somebody invents an agentic system that actually gets out in the world and does a lot of damage”
“I think that what folks who would say that OpenAI is the Google of the era would say that more and more you're going to build more of your life into it”
“the economics are incredibly difficult for them right now”
How the episode opens
Bloomberg Audio Studios podcasts radio news.
Hello, hello, hello. Welcome to On Airfest 2026. Thank you so much.
I'm Kristen Mer. I'm your MC for the day. And in case you don't know who I am, I'm a podcaster.
I'm a Royal watcher. I'm a culture critic. I've been very busy over the last week with some royal news you may have heard of.
So, um, you may know me from those things, but today is not about me. It is about the fantastic talent that is going to be on the stage and at this festival. Let's get to our first live taping of the day, Bloomberg's Odd Lots podcast.
The hosts of OddLots are Joe Weisenthal and Tracy Aloway. Please welcome them to the stage along with their very special guest, Henry Blahett. Thank you so much.
Welcome to the stage.
Thank you so much. And uh hello and welcome to a live episode of the OddLotss podcast. I'm Joe Weisenthal. — And I'm Tracy Aloway.
Tracy, we're definitely not going to do this, but it definitely feels like almost every episode could be about AI these days, right? Like it's just touching. So all the things we talk about are slowly getting subsumed into this topic that we're not going to do it, but we probably could.
It's not just that every episode could be on AI. It's that every episode could probably be made by AI at this point, right? And in fact, we've had a few people last year, I remember there were a few people who made AI generated episodes of the podcast and they weren't that bad.
And I have to think if they did it today, they would be even better.
They would definitely be better anyway.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai valuations
- software selloff
- software doom scenario
- openai competition
- ai capex spending
Companies and tickers mentioned
- OpenAI
- Regenerator
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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