OpenAI CEO Altman denies company is looking into government bailout

OpenAI (OPAI.PVT) CEO Sam Altman shot down the idea that the company is seeking some kind of government guarantee to protect it against failing on Thursday.

In a lengthy post on X, Altman denied that OpenAI wants or is seeking government guarantees for its data centers, saying “We believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make bad decisions or otherwise lose in the market.”

The post came after OpenAI CFO Sarah Friar said that the company is looking for an ecosystem of banks, private equity, and a potential government guarantee that allows the company to finance the chips necessary to power its AI investments during a conversation with WSJ Tech Live Wednesday.

But in a LinkedIn post, Friar said the use of the word “backstop” in her comments “muddled” her point.

“I was making the point that American strength in technology will come from building real industrial capacity which requires the private sector and government playing their part,” Friar wrote.

White House AI czar David Sacks later took to X, writing that there will be no federal bailouts for AI.

In his post Thursday, Altman said the one area OpenAI has discussed loan guarantees with the US government was in regard to building out semiconductor manufacturing facilities in the US. And while Altman said his company would be happy to help with such an arrangement, he added that OpenAI hasn’t applied to do so.

Questions about OpenAI’s financial stability have come up more frequently lately as the company continues to pour billions of dollars into building and renting out data center capacity to power its AI ambitions.

Altman said OpenAI currently has $1.4 trillion in commitments over the next 8 years, but that the company expects to end the year with a $20 billion annualized revenue run rate. Still, that’s far from enough to cover the expenses.

“Obviously this requires continued revenue growth, and each doubling is a lot of work! But we are feeling good about our prospects there; we are quite excited about our upcoming enterprise offering for example, and there are categories like new consumer devices and robotics that we also expect to be very significant,” he wrote on X.

“But there are also new categories we have a hard time putting specifics on like AI that can do scientific discovery, which we will touch on later.”

Altman also said that the company is looking at directly selling its own computing capacity to third-party companies, as well as potentially raising more equity and debut capital in the future.

When Brad Gerstner asked Altman about the company’s ability to pay its bills during an appearance on the Bg2 podcast last week, the CEO bristled at the question saying that he wished the company was public right now so that people could short the stock and get burned.

Analysts, however, say OpenAI and competing AI firms need to figure out a way to start generating more revenue.

“The big question that is still hanging over everybody’s head is … how does a company like OpenAI that says they’re going to spend $1.4 trillion, it’s losing billions of dollars a quarter, possibly going to pay for that,” TECHnalysis Research president and chief analyst Bob O’Donnell told Yahoo Finance.

“They’ve got to start generating some serious income. And that’s the part that has people kind of nervous.”

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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