OpenAI’s leadership has found itself in damage control mode after comments suggesting the company is seeking government financial backing for its massive AI infrastructure investments sparked immediate controversy.
The episode began at a Wall Street Journal business conference on November 5, where OpenAI CFO Sarah Friar suggested that federal loan guarantees could help finance the company’s infrastructure expansion, which is expected to exceed $1 trillion. According to the report, Friar explained that government backing could attract investment needed for AI computing infrastructure, given the uncertain lifespan of AI data centers.
“This is where we’re looking for an ecosystem of banks, private equity, maybe even governmental,” Friar said, noting that federal loan guarantees would “really drop the cost of the financing” and enable OpenAI and its investors to borrow at lower rates.
The proposal drew immediate attention for being unusual for a Silicon Valley tech giant. Such guarantees would theoretically reduce OpenAI’s borrowing costs since the government would absorb losses if the company defaulted, while also dramatically expanding the company’s potential lender pool, as many banks and financial institutions face strict limits on high-risk lending.
Hours later, Friar took to LinkedIn to clarify her position. “I want to clarify my comments earlier today. OpenAI is not seeking a government backstop for our infrastructure commitments. I used the word ‘backstop’ and it muddied the point,” she wrote. Instead, she emphasized that she was making a broader point about American technological strength requiring both private sector and government involvement, adding that “the US government has been incredibly forward-leaning and has really understood that AI is a national strategic asset.”
But Friar’s comments weren’t made in isolation. Just one day earlier, OpenAI CEO Sam Altman had made similar remarks during an interview with economist Tyler Cowen. When discussing the massive scale of AI infrastructure investments, Altman suggested that governments could serve as “the insurer of last resort” for AI projects.
“At some level, when something gets sufficiently huge, whether or not they are on paper, the federal government is kind of the insurer of last resort, as we’ve seen in various financial crises and insurance companies screwing things up,” Altman said. “I guess, given the magnitude of what I expect AI economic impact to look like, I do think the government ends up as the insurer of last resort, but I think I mean that in a different way than you mean that, and I don’t expect them to actually be writing the policies in the way that maybe they do for nuclear.”
The timing of these coordinated messages raises questions about whether OpenAI is floating trial balloons for government support as it grapples with how to finance its unprecedented capital requirements. By some estimates, OpenAI has committed approximately $1 trillion in infrastructure deals this year alone, including a $300 billion partnership with Oracle and the $500 billion Stargate project with Oracle and SoftBank.
The company’s financial situation adds urgency to the question. While OpenAI expects revenues in the tens of billions this year, that figure falls far short of covering the computing costs required to power its advanced chatbots, let alone fund its ambitious infrastructure buildout.
The government backing discussion also comes amid growing tensions over OpenAI’s spending. Last week, Altman bristled when questioned about how a company with billions in revenue could justify $1.4 trillion in spending commitments. In a podcast with investor Brad Gerstner, Altman shot back at critics, saying he wished OpenAI were public so skeptics could short the stock and “get burned on that.”
“People who talk with a lot of breathless concern about our compute stuff or whatever would be thrilled to buy shares,” Altman said. “We are taking a forward bet that it’s going to continue to grow and that not only will ChatGPT keep growing, but we will be able to become one of the important AI clouds.”
During the same interview, Friar had dismissed reports that OpenAI was preparing to go public soon, emphasizing that “IPO is not on the cards right now” and that the company’s current priority is growth. Recent media reports had suggested OpenAI was preparing for a public offering after completing a complex governance restructuring to allow the company to accept public shareholders on Wall Street.
The backtracking from both executives suggests OpenAI may have underestimated the political sensitivity of seeking government financial support. The request comes amid a massive spending spree on computing infrastructure across the AI industry, raising broader questions about how companies will recoup these investments and whether taxpayers should bear any of the risk.
For now, OpenAI insists it’s not seeking direct government backing for its infrastructure plans. But the coordinated messaging from its two top executives over consecutive days suggests the company is at least thinking seriously about what role government might play in financing the AI buildout it considers essential to maintaining American technological leadership. Whether that represents genuine policy advocacy or simply wishful thinking from executives facing daunting capital requirements remains to be seen– but it appears that OpenAI’s leaders are acutely aware that private capital alone may not be sufficient to fund their vision for AI’s future.