ChatGPT creator OpenAI, the world’s largest private company, is asking the US government to provide loan guarantees for its massive infrastructure expansion that will eventually cost more than $1 trillion.
Speaking at a Wall Street Journal business conference, OpenAI CFO Sarah Friar explained that government backing could help attract the enormous investment needed for AI computing and infrastructure, given the uncertain lifespan of AI data centres.
“This is where we’re looking for an ecosystem of banks, private equity, maybe even governmental,” Friar said.
Federal loan guarantees would “really drop the cost of the financing,” she explained, enabling OpenAI and its investors to borrow more money at lower rates to meet the company’s ambitious targets.
The proposal — unusual for a Silicon Valley tech giant — would theoretically reduce OpenAI’s borrowing costs since the government would absorb losses if the company defaulted.
Such guarantees would also dramatically expand OpenAI’s potential lender pool, as many banks and financial institutions face strict limits on high-risk lending.
OpenAI’s request for government support comes amid a massive spending spree on computing infrastructure, raising questions about how the company will recoup these investments.
By some estimates, OpenAI has committed to approximately $1 trillion in infrastructure deals this year alone, including a $300 billion partnership with Oracle and a $500 billion Stargate project with Oracle and SoftBank.
While the company expects revenues in the tens of billions this year — impressive for any startup — that figure falls far short of covering the computing costs required to power OpenAI’s advanced chatbots.
During the interview, Friar dismissed reports that OpenAI plans to go public soon. “IPO is not on the cards right now,” she said, emphasizing that the company’s current priority is growth.
Recent media reports had suggested OpenAI was preparing for a public offering after completing a complex governance restructuring that would allow the company to accept public shareholders on Wall Street.
