OpenAI CEO Sam Altman appears to be in a state of damage control in the wake of recent comments touting potential government support for the AI company.
Earlier this week, OpenAI’s chief financial officer (CFO) Sarah Friar told attendees at a Wall Street Journal event she wanted a US government “backstop” or “guarantee” for the company’s huge infrastructure loans.
“We’re looking for an ecosystem of banks, private equity, maybe even governmental….the ways governments can come to bear,” she said.
When asked whether this referred to a “government subsidy”, Friar added this could instead come in the form of a backstop or guarantee that “allows the financing to happen”.
“...That can really drop the cost of the financing, but also increase the loan to value, so the amount of debt that you can take on top of an equity portion.”
Friar’s comments come amidst a huge spending spree at OpenAI, with the company having committed to more than a trillion dollars in funding for data center expansion over the next few years.
The company has been highly vocal about compute constraints in recent months, hindering growth and prompting big-money deals with Oracle, Broadcom, Nvidia, and more recently Amazon Web Services (AWS).
Yet despite ambitious commitments, concerns have been rising over its ability to pay for these infrastructure plans.
OpenAI in damage control
Naturally, Friar’s comment set off some alarm bells, with venture capital (VC) investor and Trump administration AI czar David Sacks commenting on X that there would be “no federal bailout for AI”.
“The US has at least 5 major frontier model companies,” he said. “If one fails, others will take its place,” he wrote.
Of course, Friar wasn’t calling directly for a government bail out, despite reactionary claims circulating online. Regardless, the furor surrounding the comments prompted a u-turn from Friar in a post on LinkedIn just hours later.
“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.”
Altman also weighed in during a lengthy post on X, clarifying that the company does not have, or want “government guarantees for OpenAI datacenters”.
“We believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make bad business decisions or otherwise lose in the market,” he added.
Altman further noted that the company is on track to boost revenue streams in the coming years.
“We expect to end this year above $20 billion in annualized revenue run rate and grow to hundreds of billion by 2030,” he wrote. “We are looking at commitments of about $1.4 trillion over the next 8 years.”
OpenAI’s long-term viability is by no means a new talking point. Indeed, last year reports suggested the company was projected to record significant losses.
Just weeks later, OpenAI raised $6.6 billion in funding from a range of investors which included Microsoft, Nvidia, and an array of VC companies.
Altman has been vocal about the losses sustained by its flagship product, ChatGPT, noting earlier this year that it’s still “losing money” despite launching a pricey ChatGPT Pro subscription service.
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