OpenAI might sell AI infrastructure services to offset costs
What's the story
OpenAI is considering the possibility of selling artificial intelligence (AI) infrastructure services to other companies, according to Sarah Friar, the company's Chief Financial Officer. The move could create a new revenue stream for the firm and help offset some of its massive costs. The idea is loosely based on Amazon's success in renting out its spare cloud computing capacity.
Infrastructure growth
Stargate project and data center construction
OpenAI has been investing heavily in advanced chips and data centers to support its cutting-edge AI services. The company is also working with SoftBank Group and Oracle on a major infrastructure project called Stargate, which involves building massive data centers in the US and abroad. This comes as CEO Sam Altman hinted that OpenAI could spend trillions of dollars on data center construction in the near future.
Financial strategies
Innovative funding methods for infrastructure projects
Despite being an unprofitable business, OpenAI has seen rapid revenue growth due to consumer and business demand for ChatGPT. The firm generated $1 billion in revenue in July, its first month hitting that milestone. To support its infrastructure projects, OpenAI is seeing banks and private equity firms offer debt financing. Friar said the company is also considering other innovative ways to fund these initiatives beyond traditional debt.
Future plans
Potential stock sale and increased funding round
OpenAI is in early talks for a potential stock sale for current and ex-employees at a valuation of about $500 billion. The company's previous valuation was $300 billion in a financing round led by SoftBank. Friar said they had so much investor demand that they ended up raising $11 billion, taking the total funding amount for the current round to $41 billion.