Hajra Naz
OpenAI, the world’s leading AI company and parent of ChatGPT, went into crisis mode Thursday. The trigger was a public misstatement that quickly went viral.
Two top executives had to backtrack after suggesting OpenAI might need government help to cover its $1.4 trillion investments in AI chips and data center infrastructure.
Here’s what happened and why the comments caused so much controversy.
What OpenAI’s CFO Said
OpenAI’s CFO, Sarah Friar, raised eyebrows on Wednesday. She hinted that the U.S. government should “backstop” the company’s aggressive AI infrastructure investments.
“The backstop, the guarantee, that allows the financing to happen, can drop financing costs and increase the debt you can take on top of equity,” she said at a Wall Street Journal event.
In simpler terms, she seemed to suggest a federal government guarantee for debt that AI companies take to buy chips.
Friar quickly clarified on LinkedIn. She said the government should “play its part” alongside the private sector to grow America’s AI industry. But OpenAI was not seeking a government backstop for its infrastructure commitments.
Despite the clarification, her remarks fueled more questions about how OpenAI plans to pay for its massive $1.4 trillion AI data center and chip commitments.
Read More: Sam Altman Reveals OpenAI Hits $20B ARR and $1.4 Trillion in Data Center Deals
Why It Was Controversial
Friar’s initial comments drew criticism because they implied taxpayers might cover OpenAI’s expenses if the company fails. Think of it like your parents co-signing your lease and having to pay if you don’t.
Many were upset because OpenAI is a private company valued at $500 billion. If it succeeds, taxpayers get no direct benefit.
Mike O’Rourke, chief market strategist at Jones Trading, said:
“It is absurd that OpenAI insiders think the U.S. government should give them preferential borrowing while they grow their privately held shares on taxpayers’ backs.”
The comments also fed existing investor concerns. OpenAI is on a buying spree with Nvidia, AMD, Amazon, and others. Some worry it might need “creative financing” to cover $1.4 trillion in infrastructure, which could impact the stock market.
OpenAI CEO Sam Altman Steps In
By Thursday, CEO Sam Altman addressed the controversy. He shared that OpenAI expects $20 billion in revenue this year and aims for hundreds of billions annually by 2030 through enterprise AI and consumer devices.
Altman was clear: OpenAI does not have or want government guarantees for its data centers.
“Governments should not pick winners or losers. Taxpayers should not bail out companies that make bad business decisions,” Altman said on X.
He added that the government could invest in its own data centers or guarantee loans for U.S. chip fabrication plants. The White House has encouraged tech companies to do this to protect national security.
Altman concluded:
“If we fail, we fail. Other companies will continue doing good work. That’s how capitalism and the economy work.”
Read More: OpenAI Reveals Over 1 Million People Discuss Suicide With ChatGPT Each Week
Trump and the AI Race
Former President Donald Trump has emphasized that building AI infrastructure is a national priority. His administration promised fewer AI regulations and faster permitting for new data centers and energy projects.
Trump’s AI Czar, David Sacks, stated on X:
“There will be no federal bailout for AI. If one company fails, others will take its place.”
FAQs
1. Why did OpenAI face a PR crisis on Thursday?
A public comment by CFO Sarah Friar implied OpenAI might seek government backing for $1.4 trillion in AI infrastructure, sparking controversy.
2. Does OpenAI want government support for its AI projects?
No. CEO Sam Altman clarified that OpenAI does not want or need government guarantees for its data centers.
3. How much is OpenAI investing in AI infrastructure?
OpenAI has committed $1.4 trillion to AI chips, data centers, and related technology.
4. What was controversial about the CFO’s comments?
The comments suggested taxpayers might cover OpenAI’s expenses if it fails, which upset many since OpenAI is a private company.
5. How does the U.S. government fit into AI growth?
The government could invest in its own AI data centers or guarantee loans for domestic chip fabrication, supporting national security and AI competitiveness.
