OpenAI CEO Sam Altman has moved swiftly to quash speculation that the company is seeking a federal bailout or financial guarantees from the Donald Trump administration after a remark by his CFO ignited confusion about the company's funding strategy.
Altman Rejects Bailout Talk, Says Governments Shouldn't Pick Winners
On Thursday, in a lengthy post on X, formerly Twitter, Altman said OpenAI is not seeking and does not want any kind of government guarantee to protect it from failure.
"We do not have or want government guarantees for OpenAI datacenters. We believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make bad business decisions or otherwise lose in the market," Altman wrote.
His statement came after OpenAI CFO Sarah Friar said during The Wall Street Journal's Tech Live conference that OpenAI was exploring an ecosystem involving banks, private equity, and possibly a government "backstop" to help finance the chips required to power its AI systems.
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CFO Walks Back Comment, Says ‘Backstop' Muddled Her Point
Friar later clarified her remarks in a LinkedIn post, saying her use of the word "backstop" was misleading.
" 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," she wrote.
The White House's AI czar, David Sacks, also weighed in, stating on X that "there will be no federal bailouts for AI."
Massive Spending Raises Financial Questions
OpenAI's spending spree has fueled mounting questions about its financial stability. Altman said the company has $1.4 trillion in commitments over the next eight years, largely tied to building and leasing data centers and purchasing advanced chips.
Altman said OpenAI expects to close 2025 with a $20 billion annualized revenue run rate, but acknowledged that continued revenue growth is critical.
"Each doubling is a lot of work," he said, adding that new enterprise offerings, consumer devices and robotics could help drive future income.
Analysts Warn OpenAI Has to Start Generating ‘Serious Income‘
Industry experts say OpenAI must quickly convert its growth into profit.
The "big question" hanging over everyone's head, TECHnalysis Research president and chief analyst Bob O’Donnell told Yahoo Finance, is how a company like OpenAI — which plans to spend $1.4 trillion while losing billions each quarter — is possibly going to pay for that.
“They’ve got to start generating some serious income,” he said. “And that’s the part that has people kind of nervous.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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