OpenAI asks U.S. for loan guarantees to fund $1T AI expansion
17 days ago
- #Government Funding
- #AI Infrastructure
- #Corporate Finance
- OpenAI seeks U.S. government support to finance a massive infrastructure buildout, potentially exceeding $1 trillion.
- CFO Sarah Friar mentioned exploring federal loan guarantees to attract broader funding, involving banks, private equity, and possibly government participants.
- Government backing would lower borrowing costs and expand OpenAI’s access to credit markets by protecting lenders from defaults.
- OpenAI’s request is unusual for a Silicon Valley firm, aligning it with sectors like energy and infrastructure that rely on state support.
- The company has capital-intensive projects, including a $300 billion deal with Oracle and a $500 billion 'Stargate' data center venture with Oracle and SoftBank.
- Despite projecting tens of billions in revenue, OpenAI’s income is insufficient to cover its AI operational costs.
- Friar dismissed IPO rumors, stating the company’s focus is on scaling capabilities and securing long-term financing.