OpenAI’s Money Problem: Why the Government Might Have To Bail Them Out With Public Funds
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Here’s a riddle: how does a non-profit make a profit?
That’s what OpenAI is currently wrestling with. They are now simultaneously the most valued startup in the world at half a trillion dollars, the flagship of the AI boom, but also they haven’t made any money yet. …what a conundrum.
The current roadmap for the company is to spend far beyond its revenue and the question becomes, how?
Well, recently OpenAI’s CFO Sarah Friar said they might find a solution “looking for an ecosystem of banks, private equity, maybe even governmental” partners and that there are many “ways governments can come to bear” which “can really drop the cost of the financing but also increase the loan-to-value, so the amount of debt you can take on top of an equity portion.”
The interviewer asked if that was like a federal subsidy, to which Friar said she meant, “the backstop, the guarantee, that allows the financing to happen.”
OpenAI? More Like Open A Bank Account
Cool, simple, so the American public can foot the bill basically, oh no wait… SCRATCH THAT.
Friar has since walked back her comments in a post on LinkedIn, writing, “I want to clarify my comments earlier today. OpenAI is not seeking a government backstop for our infrastructure commitments.”
“I used the word “backstop” and it muddied the point. As the full clip of my answer shows, I was making the point that American strength in technology will come from building real industrial capacity which requires the private sector and government playing their part.”
Smooth positive pivot there.
“As I said, the US government has been incredibly forward-leaning and has really understood that AI is a national strategic asset.” …Aaand a final pivot to ass-kissing. Stuck the landing, well played PR team.
Ah, ok, fine, fine fine. So what is the plan then? Well, OpenAI’s already in talks with Microsoft to help them go public and obviously they’re not short of private interest. So we can only wait and see how that plays out.
But the Friar’s words might be prophetic if, as many fear, the AI bubble does burst we could see a crash like nothing we’ve ever seen and OpenAI would be at the wheel.
Sam Altman has his fingers in so many pies that if the pies explode, then who’s going to save his precious fingers?
It looks like the United States Government of America might just be that finger doctor after all…
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