Jensen Huang revealed last week that last September’s MoU which proposed the $100 billion investment was non-binding and that Nvidia has doubts about going ahead with it.
Huang has pointed to a ‘lack of discipline’ in OpenAI’s business approach and to the strength of the competition OpenAI faces from Google’s Gemini and Anthropic’s Claude. Nonetheless, Huang says Nvidia will invest in OpenAI’s upcoming IPO but not as much as $100 billion.
OpenAI’s burn rate is one of the fastest ever seen and the company is currently on course to burn through $115 billion by 2029.
This year it will lose $14 billion. It has commitments to spend $1.4 trillion on datacentres while having $12 billion sales revenues last year.
An option to tap public funds, suggested by OpenAI’s CFO last year, was quickly ruled out by White House officials.
OpenAI is now implementing a plan to raise revenue by introducing advertising on its ChatGPT search results – a move previously described by CEO Sam Altman as a ‘last resort’.
OpenAI is not the only AI project whose goals are massively underfunded. The $500 billion Stargate project has raised only $52 billion in committed funding, according to The Information.
Meanwhile the cost of insuring against Oracle defaulting on the the $56 billion it has borrowed to build datacentres has tripled since June and, last week, Microsoft’s shareholders showed their displeasure at the amount the company is spending on datacentres with a substantial share sell-off.
