Sam Altman says he doesn’t want the government to bail out OpenAI if it fails

OpenAI executives have fielded many questions about how they expect to pay for the $1.4 trillion in data center expansions and usage commitments they’ve accrued this year, given that their revenues — while rising rapidly — are at an annual run rate of $20 billion, CEO Sam Altman said Thursday. in a message on X.

Altman’s comments came in response to comments from OpenAI CFO Sarah Friar, which she quickly backtracked. Speaking to the Wall Street Journal on Wednesday, Friar said she wanted the U.S. government to “backstop” her company’s infrastructure loans. This, she explained, would make the company’s loans cheaper and ensure it would always have the latest and greatest chip.

A subordinated loan exists if the government guarantees it, so that the taxpayer has to pay the bill if the company defaults. Lenders tend to reward such low-risk loans with better terms.

Friar said that using older chips, which OpenAI must do with computing limitations, makes financing options more affordable, but that the company’s goal is to always put its state-of-the-art models on the latest, greatest chips.

So how do you pay for this revolving door of chips? She said the company is looking for an “ecosystem” to help, including banks, PE firms and, she hoped, the government.

When asked what she wanted the government to do, she said: “…the backstop, the guarantee that makes the financing possible. That can really reduce the cost of financing, but also increase loan-to-value, so the amount of debt you can take on on top of some equity.”

She also suggested that such conversations, especially in the US, were already in the works, saying: “I think we’re seeing that. The US government in particular has been incredibly progressive and really understood that AI is almost a national strategic asset.”

After The Wall Street Journal came out the fragment where she talks this desire for a federal safety net, and more than enough of it X users of big followers Scoffing at the idea, Friar quickly backtracked on her comments.

“I want to clarify my comments earlier today. OpenAI is not looking for a government backstop for our infrastructure obligations. I used the word ‘backstop’ and that obscured the point,” she wrote on LinkedIn.

On Thursday, Trump’s AI czar David Sacks weighed in. Sacks (who is himself a major VC in Silicon Valley) wrote on X that the US has no plans to bail out any AI company.

“There will be no federal bailout for AI. The US has at least five major frontier model companies. If one fails, others will take their place,” he wrote, adding that what the administration wants to do is “make licensing and energy generation easier.” Although he did not name her, he also forgave Friar for “clarifying” her position.

In the wake of this, Altman wrote a lengthy post on X, echoing Sacks’ sentiments.

“We do not need or want government guarantees for OpenAI data centers. We believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make poor business decisions or otherwise lose in the marketplace,” he wrote.

He also clarified that the subordinated loans have been discussed – but not for his company.

“The only area where we have discussed loan guarantees is as part of supporting semiconductor plant buildouts in the US, where we and other companies have responded to the government’s call and are happy to help (although we have not formally requested it).”

It’s hard to fault Friar for putting forward the idea. She’s right to say that such a guarantee would make her financing job easier, even though, as Sacks wrote in his string, the idea of ​​asking for a taxpayer-funded bailout is “ridiculous.”

Now that she’s heard a resounding public “no” from someone who needs them on that idea, she and OpenAI CEO Sam Altman can expect many more questions about how they expect to pay for their $1 trillion expansion.

Altman indeed seems prepared for something like that.

“We expect to exceed $20 billion in annualized revenue this year and grow to hundreds of billions by 2030. We are looking at commitments of approximately $1.4 trillion over the next eight years,” he wrote, adding that the company feels good about its “prospects,” especially its enterprise offerings, new consumer devices and robotics.