{"id":6544,"date":"2025-11-07T15:41:51","date_gmt":"2025-11-07T15:41:51","guid":{"rendered":"https:\/\/musictechohio.online\/site\/openai-financial-support-government\/"},"modified":"2025-11-07T15:41:51","modified_gmt":"2025-11-07T15:41:51","slug":"openai-financial-support-government","status":"publish","type":"post","link":"https:\/\/musictechohio.online\/site\/openai-financial-support-government\/","title":{"rendered":"OpenAI Exec Says It Could Use Some Financial Support From the Government"},"content":{"rendered":"
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As investors are growing increasingly concerned over an AI bubble, triggering a major tech selloff earlier this week<\/a>, OpenAI is still in full-steam-ahead mode.<\/p>\n

During the Wall Street Journal<\/em>\u2018s Tech Live conference on Wednesday, the ChatGPT maker\u2019s chief financial officer Sarah Friar revealed that the company has no plans of going public, contradicting rumors<\/a>.<\/p>\n

\u201cIPO is not on the cards right now,\u201d she said at the event. \u201cWe are continuing to get the company into a state of constantly stepping up into the scale we are at, so I don\u2019t want to get wrapped around an IPO axle.\u201d<\/p>\n

And as the company eschews a public listing, Friar said that it\u2019s looking to create an \u201cecosystem of banks, private equity, maybe even governmental\u201d so it can take on even more debt.<\/p>\n

She hinted that the US government could \u201cbackstop the guarantee that allows the financing to happen,\u201d but didn\u2019t elaborate any further on how such an arrangement would work.<\/p>\n

Her comments were bound to raise plenty of eyebrows on Wall Street. OpenAI has been losing a staggering amount of money and has yet to prove it can deliver on a return on investment. Does that really make it a prime candidate for governmental backing? Could Briar be implying that the government should bail OpenAI out in case things go south?<\/p>\n

It didn\u2019t take long for Friar to take to LinkedIn<\/a> and renege on her previous statement, saying that \u201cOpenAI is not seeking a government backstop for our infrastructure commitments.\u201d<\/p>\n

\u201cI used the word \u2018backstop\u2019 and it muddied the point,\u201d she added.<\/p>\n

Even CEO Sam Altman intervened on X-formerly-Twitter<\/a> in an apparent attempt to calm spooked investors, saying that \u201cwe do not have or want government guarantees for OpenAI data centers.\u201d<\/p>\n

\u201cWe believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make bad business decisions or otherwise lose in the market,\u201d he wrote, arguing that it makes \u201ca lot of sense\u201d for the government to have its own \u201cstrategic national reserve of computing power.\u201d<\/p>\n

Despite OpenAI\u2019s immediate 180 following Friar\u2019s foot-in-mouth blunder, the Trump administration has already shown that it\u2019s willing to go far<\/a> in its efforts to facilitate AI deals and even clear the way for infrastructure buildouts<\/a> by loosening environmental regulations.<\/p>\n

For now, OpenAI doesn\u2019t seem overly concerned about the billions of dollars it\u2019s suspected to be bleeding every quarter. A recent analysis by\u00a0The Register<\/em><\/a>\u00a0<\/em>suggested that it lost $11.5 billion last quarter.<\/p>\n

The firm is planning to spend upwards of $1 trillion<\/a> over the next five years to build out AI infrastructure, capital expenditure that would require the company to rapidly scale up its revenue as well to be able to make payments on a growing mountain of debt.<\/p>\n

That could be far easier said than done. OpenAI CEO Sam Altman recently boasted that its blockbuster product, ChatGPT, has 800 million users \u2014 except that only a mere five percent<\/a> are willing to pay for a subscription, forcing the company to subsidize hundreds of millions of free users by taking on the expense of additional compute. Worse yet, recent figures suggest ChatGPT revenue is starting to plateau in Europe<\/a> and elsewhere<\/a>, indicating waning demand.<\/p>\n

Briar said this week that the company is looking for new ways to grow sales outside of its ChatGPT, claiming that enterprise sales make up 40 percent of revenue, compared to just 30 percent at the beginning of 2025.<\/p>\n

Either way, she said that she wasn\u2019t \u201coverly focused on a break-even moment today,\u201d saying that she has a \u201chealthy enough margin structure that I could do that by pulling back on investment.\u201d<\/p>\n

That\u2019s despite recently completing the restructuring of its for-profit arm<\/a>, in a move that critics say has largely subjugated its original nonprofit roots.\u00a0<\/p>\n

Finances have clearly been a sore point for OpenAI executives. Altman similarly said that he\u2019s not concerned<\/a> about making money. When he was recently challenged<\/a> by OpenAI investor and podcaster Brad Gerstner about how a \u201ccompany with $13 billion in revenues\u201d can \u201cmake $1.4 trillion of spend commitments,\u201d he responded forcefully, implying Gerstner should sell his shares<\/a> if he doesn\u2019t believe in the company\u2019s outlook.<\/p>\n

Given the recent slip in confidence among investors, the cracks in the immense hype surrounding AI are starting to show. Where that leaves OpenAI\u2019s planned spending spree remains to be seen. The company certainly has a lot to prove, especially when it comes to its business fundamentals.<\/p>\n

In his tweet responding to Friar\u2019s comments, Altman once again attempted to sell investors on an extremely bright future ahead, turning the hype dial up to 11 once more.<\/p>\n

\u201cWe expect to end this year above $20 billion in annualized revenue run rate and grow to hundreds of billion by 2030,\u201d he wrote. \u201cWe are quite excited about our upcoming enterprise offering for example, and there are categories like new consumer devices and robotics that we also expect to be very significant.\u201d<\/p>\n

During this week\u2019s conference, tellingly, Briar lamented that there wasn\u2019t enough excitement about AI \u2014 despite the enormous amount of hype and tens of billions of dollars in investment.<\/p>\n

\u201cI don\u2019t think there\u2019s enough exuberance about AI, when I think about the actual practical implications and what it can do for individuals,\u201d she said. \u201cWe should keep running at it.\u201d<\/p>\n

If things were to go south, Altman said that he\u2019s willing to take the blame instead of asking for a government bailout.<\/p>\n

\u201cWe plan to be a wildly successful company, but if we get it wrong, that\u2019s on us,\u201d he wrote.<\/p>\n

More on OpenAI:<\/strong> The Amount of Money OpenAI Lost Last Quarter Will Make You Choke on Your Slurpee<\/em><\/a><\/p>\n

The post OpenAI Exec Says It Could Use Some Financial Support From the Government<\/a> appeared first on Futurism<\/a>.<\/p>\n<\/div>\n

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