OpenAI, the largest private firm globally and creator of ChatGPT, is requesting loan guarantees from the US government to support its extensive infrastructure expansion, which is projected to exceed $1 trillion in cost.

During a Wall Street Journal business conference, OpenAI CFO Sarah Friar stated that government support could assist in drawing the significant investments required for AI computing and infrastructure, considering the unpredictable longevity of AI data centers.

"Here is where we're seeking a network of banks, private equity, and possibly even governmental," Friar stated.

Federal loan guarantees would "significantly reduce the financing costs," she stated, allowing OpenAI and its backers to secure larger loans at lower interest rates to achieve the firm's ambitious goals.

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The proposal — atypical for a Silicon Valley technology giant — could potentially lower OpenAI's borrowing expenses as the government would cover losses if the company failed to pay.

These guarantees would also significantly broaden OpenAI's potential pool of lenders, since numerous banks and financial institutions encounter stringent restrictions on high-risk lending.

OpenAI's appeal for governmental assistance arises during a significant investment in computing infrastructure, prompting concerns over how the company will recover these costs.

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According to certain estimates, OpenAI has pledged around $1 trillion in infrastructure agreements this year, which includes a $300 billion collaboration with Oracle and a $500 billion Stargate initiative with Oracle and SoftBank.

Although the company anticipates revenues in the tens of billions this year -- remarkable for any startup -- this amount is significantly inadequate to meet the computing expenses necessary for operating OpenAI's sophisticated chatbots.

 

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"An IPO is not in the plans at the moment," she stated, highlighting that the company's main focus is on growth.

According to reports,  OpenAI was preparing for a public offering after completing a complex governance restructuring that would allow the company to accept public shareholders on Wall Street.