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How OpenAI Uses Complex and Circular Deals to Fuel Its Multibillion-Dollar Rise
Sam Altman, the chief executive of OpenAI, says that technological revolutions are driven by more than just technology. They are also driven, he argues, by new ways of paying for them.
“There is always a lot of focus on technological innovation. What really drives a lot of progress is when people also figure out how to innovate on the financial model,” he recently said at the site of a data center that OpenAI is building in Abilene, Texas.
Over the last several years, Mr. Altman’s company has found unusual and creative ways of paying for the computing power needed to fuel its ambitions.
Many of the deals OpenAI has struck — with chipmakers, cloud computing companies and others — are strangely circular. OpenAI receives billions from tech companies before sending those billions back to the same companies to pay for computing power and other services.
Industry experts and financial analysts have welcomed the start-up’s creativity. But these unorthodox arrangements have also fueled concerns that OpenAI is helping to inflate a potential financial bubble as it builds what is still a highly speculative technology.
Here are unusual financial agreements helping to drive the ambitions of OpenAI, the poster child of the artificial intelligence revolution.
OpenAI $13 billion funding $13 billion cloud computing Microsoft OpenAI $13 billion funding $13 billion cloud computing Microsoft
From 2019 through 2023, Microsoft was OpenAI’s primary investor. The tech giant pumped more than $13 billion into the start-up. Then OpenAI funneled most of those billions back into Microsoft, buying cloud computing power needed to fuel the development of new A.I. technologies.
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