OpenAI’s data center partners are reportedly set to accrue nearly $100 billion in borrowing.
As the Financial Times (FT) reported Sunday (Nov. 30), this has allowed the high profile artificial intelligence (AI) startup to reap the rewards of a debt-driven spending wave without having to take on financial risks.
An analysis by the FT found that SoftBank, Oracle and CoreWeave have borrowed at least $30 billion to invest in OpenAI or help build its data centers.
Meanwhile, investment company Blue Owl Capital and computing infrastructure providers such as Crusoe also depend on deals its customers have inked with OpenAI to service roughly $28 billion in loans.
Lastly, a group of banks was in discussions to loan another $38 billion for Oracle and data center company Vantage to pay for additional sites for OpenAI, the report said, citing sources familiar with the matter. The deal is expected to become final in the weeks ahead.
OpenAI executives have said they aim to raise substantial debt to help pay for these contracts, but thus far the financial burden has fallen to its partners and their lenders.
“That’s been kind of the strategy,” said a senior OpenAI executive. “How does [OpenAI] leverage other people’s balance sheets?”
The report noted that the size of these loans that depend on OpenAI will deepen scrutiny into the $1.4 trillion in deals the company has signed this year to procure computing power in the next eight years. Those commitments, the FT added, vastly overshadow the company’s $20 billion in anticipated annualized revenue for the year.
Sources close to OpenAI told the FT the startup has little debt on its books, with a $4 billion credit facility it landed last year but has yet to touch. The company requires massive amounts of computing power to train and run its AI models, the report added.
“Building AI infrastructure is the single most important thing we can do to meet surging global demand. … The current compute shortage is the single biggest constraint on OpenAI’s ability to grow,” the company told the FT.
The news follows a report from last week that OpenAI was projecting that its ChatGPT will have at least 220 million paid subscribers by 2030, compared to 35 million today.
Those figures came from a report by The Information, which also said the company expects about 20% of its revenue to come from new products related to shopping and advertising. For example, the personal shopping assistant for ChatGPT the company launched last week could allow for monetization through ads or commissions.
Source: https://www.pymnts.com/