OpenAI seeks government support to boost AI investment

ChatGPT’s developer, OpenAI, the world’s largest private company, is seeking loan guarantees from the U.S. government for a massive infrastructure expansion that will ultimately cost more than $1 trillion.

Speaking at the Wall Street Journal Business Conference, OpenAI Chief Financial Officer Sarah Friar explained that government support could help attract the large investments needed for AI computing and infrastructure, given the uncertain lifespan of AI data centers.

“This is where we’re exploring the banking, private equity and even government ecosystems,” Friar said.

She explained that the federal loan guarantee will “significantly lower funding costs” and allow OpenAI and its investors to borrow more money at lower interest rates to achieve the company’s ambitious goals.

The proposal, unusual for a Silicon Valley tech giant, would theoretically reduce OpenAI’s borrowing costs because the government would absorb losses if OpenAI defaults.

Such a guarantee would also dramatically expand OpenAI’s pool of potential lenders, as many banks and financial institutions face severe restrictions on high-risk lending.

OpenAI’s request for government aid comes amid massive spending on computing infrastructure, raising questions about how the company will recoup those investments.

By some estimates, OpenAI has committed to around $1 trillion in infrastructure deals this year alone, including a $300 billion partnership with Oracle and the $500 billion Stargate project with Oracle and SoftBank.

The company is projecting tens of billions of dollars in revenue this year, impressive for any startup, but those numbers don’t come close to covering the computing costs needed to power OpenAI’s advanced chatbots.

During the interview, Friar denied reports that OpenAI was planning to go public soon.

“We are not considering an IPO at this time,” he said, stressing that the company’s current priority is growth.

Recent media reports have suggested that OpenAI is preparing to go public after completing a complex governance restructuring that will allow it to be accepted by public shareholders on Wall Street.