OpenAI has entered into agreements valued at approximately $1 trillion to secure the computing power required for its artificial intelligence models. These commitments far exceed the company’s current revenue, as Tabby Kinder and George Hammond report for the Financial Times. The deals involve major technology companies such as Nvidia, AMD, Oracle, and CoreWeave.
Over the next decade, these partnerships will provide OpenAI with access to more than 20 gigawatts of computing capacity, which is roughly equivalent to the output of 20 nuclear reactors. The company is spending heavily on infrastructure and talent, with one analyst estimating a potential loss of $10 billion this year.
The arrangements include complex circular financing. Nvidia plans to invest $100 billion in OpenAI, which can then use the funds to purchase Nvidia’s chips. Similarly, AMD will grant OpenAI warrants to buy company stock at a very low price. OpenAI could sell these shares to fund its spending on AMD’s technology if the stock price rises.
According to Gil Luria, an analyst at DA Davidson, the strategy reflects a “fake it until you make it” ethos. To fund its expansion, OpenAI has raised significant equity and has begun taking on debt.
Despite concerns about the financial obligations, OpenAI’s chief executive Sam Altman stated that profitability is not currently a top priority. He said the company is focused on a phase of investment and growth.