"Earlier this week, OpenAI's chief financial officer (CFO) Sarah Friar told attendees at a event she wanted a US government "backstop" or "guarantee" for the company's huge infrastructure loans. "We're looking for an ecosystem of banks, private equity, maybe even governmental....the ways governments can come to bear," she said. When asked whether this referred to a "government subsidy", Friar added this could instead come in the form of a backstop or guarantee that "allows the financing to happen"."
"Friar's comments come amidst a huge spending spree at OpenAI, with the company having committed to more than a trillion dollars in funding for data center expansion over the next few years. The company has been highly vocal about compute constraints in recent months, hindering growth and prompting big-money deals with Oracle, Broadcom, Nvidia, and more recently Amazon Web Services (AWS). Yet despite ambitious commitments, concerns have been rising over its ability to pay for these infrastructure plans."
"Naturally, Friar's comment set off some alarm bells, with venture capital (VC) investor and Trump administration AI czar David Sacks commenting on X that there would be "no federal bailout for AI". "The US has at least 5 major frontier model companies," he said. "If one fails, others will take its place," he wrote. Of course, Friar wasn't calling directly for a government bail out, despite reactionary claims circulating online. Regardless, the furor surrounding the comments prompted a u-turn from Friar in a post on LinkedIn just hours later."
OpenAI CFO Sarah Friar sought a US government backstop or guarantee to support the company's large infrastructure loans. The proposed backstop or guarantee could lower financing costs and increase loan-to-value, enabling more debt atop equity. OpenAI has committed to more than a trillion dollars for data center expansion and has signed major deals with Oracle, Broadcom, Nvidia, and Amazon Web Services because of compute constraints. Rising concerns about the company’s ability to fund these plans triggered public alarm and investor pushback, including statements rejecting a federal bailout, and prompted Friar to revise her remarks publicly hours later.
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