"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."
Technological revolutions depend on both technical breakthroughs and new ways of funding them. OpenAI has used creative financing to secure massive computing resources, receiving funds from tech companies and then spending much of those funds back with the same firms for cloud services. Microsoft invested over $13 billion from 2019 through 2023, and OpenAI used most of that for Microsoft cloud computing. When Microsoft capacity fell short, OpenAI contracted other providers including Oracle and smaller firms like CoreWeave. These circular financial arrangements have drawn praise for creativity and raised concerns about inflating a speculative financial bubble in AI.
Read at www.nytimes.com
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