Greetings from Austin. Today's my keynote at the . So much AI news has happened in the past 48 hours that I've had to change my slides twice!
In the news: OpenAI's image generation has gone so viral that even if you haven’t tried it, you probably know exactly what you’re missing — hyper-realistic AI images created in seconds, now throttled because the GPUs can’t take the heat.
CEO Sam Altman posted on X: “It’s super fun seeing people love images in ChatGPT, but our GPUs are melting.” Translation: demand is off the charts, and the infrastructure can’t keep up — not even at OpenAI.
The company is “temporarily” rate-limiting image requests as it scrambles to optimize efficiency. Free-tier users, who were recently promised limited image access, will be capped at three generations per day “soon.” No word on limits for paid users, but it’s safe to assume they’re feeling the slowdown, too.
This crunch stems from the rollout of OpenAI’s new image tool powered by GPT-4o — an upgrade that’s dramatically improved realism, speed, and even solved issues like rendering legible text. It’s good. Too good. The response has been overwhelming.
It’s also a stark reminder: AI generation isn’t magic. It’s compute. Lots of it. And energy. Tons of it. Every image request is powered by clusters of high-performance GPUs running at full throttle. This is not sustainable at scale — at least not yet.
The “step change” in quality has exposed the physical limits of today’s AI infrastructure. It’s a fascinating moment: the software is evolving faster than the hardware can support it. For enterprise leaders, this is more than a curiosity. It’s a lesson. Whether you’re building AI internally or relying on vendors, your growth may be constrained by bottlenecks you don’t control. OpenAI will scale up. Everyone does — eventually. Right now, it’s not just the GPUs overheating — it’s everyone’s expectations.
As always your thoughts and comments are both welcome and encouraged. Just reply to this email. -s
Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named he covers tech and business for , is a regular commentator on CNN and writes a popular . He's a , and the creator of the popular, free online course, . Follow or visit .
