The chief financial officer of OpenAI has retracted her idea that the US government provide loan guarantees for the ChatGPT-maker’s massive infrastructure expansion, which will cost more than $1 trillion.
CFO Sarah Friar on Monday explained that a government “backstop” could help attract the enormous investment needed for AI computing and infrastructure, given the uncertain lifespan of AI data centers.
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.
But Friar later retracted the suggestion, writing on LinkedIn that “OpenAI is not seeking a government backstop for our infrastructure commitments.”
“I used the word ‘backstop’ and it muddied the point,” Friar said.
“As the full clip of my answer shows, I was making the point that American strength in technology will come from building real industrial capacity which requires the private sector and government playing their part,” she said.
Friar’s original comments caused alarm in investment circles, coming amid a massive spending spree by OpenAI on computing infrastructure that has raised questions about how the company will recoup these investments.
“Bad vibes all around,” wrote Wasteland Capital, a X account closely read in Silicon Valley.
OpenAI has committed to more than $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.
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