"Warren writes that she is worried OpenAI "has committed to more than a trillion dollars in spending despite not yet turning a profit" and "appears to be seeking government assistance should it prove unable to pay its bills.""
"The senator, a ranking member on the Senate Committee on Banking, Housing, and Urban Affairs, says the company's "increasingly tangled web of speculative, debt-based industry partnerships and circular spending arrangements" creates risk for the entire US economy, which could leave the government with little option but to step in should the AI industry falter. Warren points to CoreWeave as an example, noting that the company is saddled with debt to fulfill its contract with OpenAI, which has "comparatively little debt on its own balance sheet.""
"OpenAI has repeatedly rejected the idea it is seeking or has government guarantees. The company has been in a near-constant state of PR crisis over the matter since last November, when CFO Sarah Friar suggested taxpayers should "backstop" the company's hefty infrastructure investments. Friar swiftly walked back her remarks and Altman stressed that OpenAI does "not have or want government guarantees for OpenAI datacenters [sic].""
Senator Elizabeth Warren is demanding assurances that OpenAI will not seek government bailouts if its AI investments fail to turn a profit. She warns OpenAI has committed over a trillion dollars in spending while remaining unprofitable and may be preparing to "privatize profits and socialize losses." Warren cites a tangled web of speculative, debt-based partnerships and points to CoreWeave’s debt as a contagion risk tied to OpenAI contracts. OpenAI rejects targeted government guarantees after a CFO comment about taxpayers "backstop[p]ing" infrastructure, but Warren warns industry-wide loans could still indirectly benefit OpenAI.
Read at The Verge
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