"OpenAI will cobble together a clutch of investors to raise as much as $100 billion. Some of that money may come from sovereign wealth funds, which could include one run by the United Arab Emirates. The deal could set OpenAI's valuation at $850 billion, a massive amount for a company that says it will not be profitable until 2030. OpenAI will also need as much as hundreds of billions of dollars to build data centers, and probably will need more financing to handle this infrastructure."
"Another challenge to the valuation of these companies and their products is their reliance on electricity, which became widely used in America a century ago. Put simply, there is not enough of it today. AI data centers are the most electricity-hungry projects in history, while parts of the U.S. electric grid are decades old. Electricity generation relies on a fragile combination of coal, natural gas, and wind, hydro, and solar power."
OpenAI plans to assemble investors to raise up to $100 billion, potentially including sovereign wealth funds such as one from the United Arab Emirates, which could set its valuation at $850 billion despite a projected lack of profitability until 2030. The company will need hundreds of billions for data-center construction and further infrastructure financing. Competitors including Alphabet's Gemini 3 and Gemini 3 Flash, Microsoft, Perplexity, and xAI are advancing rapidly with multi-billion-dollar investments, narrowing advantages. AI offerings may converge, creating an arms race that stagnates. Heavy electricity demand, an aging U.S. grid, and political and local resistance to data centers pose major constraints.
Read at 24/7 Wall St.
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