OpenAI’s explosive growth is causing a wide range of technology partners to accumulate unprecedented levels of debt. According to an analysis by the Financial Times, parties such as SoftBank, Oracle, and CoreWeave have collectively borrowed at least $30 billion.
OpenAI is using that money to invest in the AI start-up. Or to build data centres needed for the continued growth of ChatGPT and other models. When the financing from investors and infrastructure suppliers is also taken into account, the total debt associated with OpenAI is now approaching $100 billion.
Investors such as Blue Owl Capital and compute infrastructure companies such as Crusoe are heavily dependent on their collaboration with the AI start-up. Together, they hold around $28 billion in loans linked to computing power, data centers, or long-term hardware lease arrangements. In addition, a group of banks is negotiating new financing of approximately $38 billion for Oracle and data center developer Vantage. This loan should enable OpenAI to establish new locations needed to train future models on a large scale.
Although OpenAI itself indicates that it wants to take on more debt in the long term, most of the financial responsibility now lies with partners and their lenders. According to the Financial Times, the internal view is that growth can best be facilitated when other parties make their balance sheets available for the necessary infrastructure. At the same time, the company has signed $1.4 trillion in multi-year commitments for chips and computing power this year, which stands in stark contrast to its expected revenue of approximately $20 billion.
Most valuable private company
The start-up, now valued at $500 billion and the most valuable private company in the world, emphasizes that scaling up remains necessary. The development of increasingly powerful AI models requires enormous amounts of computing power and energy, while global shortages of the necessary hardware are emerging. According to a Financial Times report, OpenAI sees this infrastructure shortage as the biggest brake on further growth.
Oracle is one of the companies that has already taken on significant debt financing. The company previously issued $18 billion in bonds to fund OpenAI’s infrastructure. Analysts expect Oracle to borrow an additional $100 billion in the coming years to meet all its obligations to the AI start-up.
Many of these investments are placed in separate project companies designed to isolate risks. This means that in the event of default, the burden falls entirely on the financiers. Meanwhile, the mountain of debt surrounding OpenAI seems far from peaking, as partners continue to invest to meet the growing demand for computing power.