"It is the $1.4tn (1.1tn) question. How can a loss-making startup such as OpenAI afford such a staggering spending commitment? Answer that positively and it will go a long way to easing investor concerns over bubble warnings in the artificial intelligence boom, from lofty tech company valuations to a mooted $3tn global spend on datacentres. The company behind ChatGPT needs a vast amount of computing power or compute, in tech jargon to train its models, produce their responses and build even more powerful systems in the future."
"Sam Altman, the OpenAI chief executive, first attempted to deal with it in an awkward exchange with a leading investor in the company, Brad Gerstner of Altimeter Capital, that ended with Altman ordering: enough. Speaking on his podcast with Altman last month, Gerstner described the company's ability to pay for more than $1tn in compute costs, while revenue is running at $13bn a year, as a question hanging over the market. Altman responded: First of all, we're doing well more revenue than that. Second of all, Brad if you want to sell your shares, I'll find you a buyer. I just, enough."
OpenAI has committed $1.4tn of compute spending over eight years, vastly exceeding its $13bn annual revenue. That compute funds chips, servers and datacenter capacity to train and run large models and to develop more powerful systems. The scale fuels investor unease about an AI spending bubble and a broader $3tn global datacentre build-out. A tense exchange between Sam Altman and investor Brad Gerstner highlighted these funding questions. CFO Sarah Friar proposed exploring bank, private equity and government-backed guarantees to reduce financing costs for chip and infrastructure purchases.
Read at www.theguardian.com
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