OpenAI Partners Amass $100 Billion Debt Pile To Fund Its Ambitions (ft.com)
- Reference: 0180231371
- News link: https://slashdot.org/story/25/11/28/1442237/openai-partners-amass-100-billion-debt-pile-to-fund-its-ambitions
- Source link: https://www.ft.com/content/5605d086-289e-4b5f-803b-4c13666976a5
> SoftBank, Oracle and CoreWeave have borrowed at least $30 billion to invest in the start-up or help build its data centres, according to FT analysis. Investment group Blue Owl Capital and computing infrastructure companies such as Crusoe also rely on deals with OpenAI to service about $28 billion in loans.
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> A group of banks is in talks to lend another $38 billion for Oracle and data centre builder Vantage to fund further sites for OpenAI, according to people familiar with the matter. The deal is expected to be finalised in the coming weeks. OpenAI executives have said they plan to raise substantial debt to help pay for these contracts, but so far the financial burden has fallen to its counterparties and their lenders. "That's been kind of the strategy," said a senior OpenAI executive. "How does [OpenAI] leverage other people's balance sheets?"
[1] https://www.ft.com/content/5605d086-289e-4b5f-803b-4c13666976a5
It could be worth it (Score:5, Interesting)
If they end up somehow building strong AI, then the investment will pay off in huge multiples and will absolutely be worth it.
If they don't manage to create strong AI, but manage to create a better search engine that somehow replaces Google, then it will be worth the investment (for comparison, Google profit is on the order of $100 billion per year).
There are a lot of other potential products that could bring heavy revenue, even without strong AI. AirBnB has $2billion a year in net profit, which isn't great but it's conceivable that even with the current crappy AI product, OpenAI could make a reasonable amount of revenue. With billions of potential customers, they don't need to make a lot of money off each person.
Re: (Score:3)
The problem is the amount of enshittification that ChatGPT will have to underdo to make any serious amount of money.
A Google search is going to cost fractions of a cent, whereas some estimates put a ChatGPT query as costing around 36 cents.
Assuming that they maintain their free tier, that's a hell of a lot of expenses to offset before you even start to dent other expenses and start to approach profit.
So once the "growth phase" is done, I would expect ChatGPT to be quickly stuffed full of every type of
Re: (Score:2)
The way it goes, pretty soon any company that want to survive will have to use AI. Will it be from OpenAI, that's another story.
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Is there even a good business model for superintelligence?
I think they will get to the "Google" model. Since it showed that AI chats and search engines are to converge, it is pretty clear what the main business model will be. Chat (and the voice assistant version of it) will become the primary way to get information, both knowledge and problem solving, with the service providing a combination of search and AI inference. I'd say Perplexity is undervalued, but they might be one of the pioneers that will be fo
Re: (Score:2)
> If they end up somehow building strong AI ...
We can stop right there, because that is not happening anytime soon and LLMs will NOT be the way there if it ever happens.
Re: It could be worth it (Score:1)
Why should we trust your unsupported hallucinations over the consensus? Mood affiliation?
Re: (Score:3)
Funny, how you use cheap manipulation techniques in your answer. Makes me think you have absolutely nothing except a big ego.
"Creative Accounting" (Score:2)
GNCA covered this in detail. There's some insane financial reach arounds going on with everyone promising billions to everyone else in order to pump up the stock pricing:
Worth the watch:
[1]https://youtu.be/h3JfOxx6Hh4 [youtu.be]
[1] https://youtu.be/h3JfOxx6Hh4
Re: (Score:2)
It's always fun to bet with someone else's money...unless it's the mob's...
Somebody asked what problem (Score:5, Informative)
AI was going to solve so that was worth a trillion dollars.
Wages. The problem AI is designed to solve is paying wages.
Re: (Score:2)
No. The "problem" that LLMs are pushed as "being able to solve" is wages.
First, wages are not actually a problem. If you want a market, people need to be able to buy products. Second, LLMs have so far proven incapable and incompetent in anything that would have been a real killer. They will continue to do so.
Hence we will get (if the manage to bring down the cost massively, which is a big if) somewhat better search that occasionally returns total crap, cheap generation of low quality graphics and music and,
What makes you think capitalists (Score:2)
Want to market? You need to read up on the history of antitrust law or literally pay attention to anything that's going on in the economy right now. Capitalists especially the billionaire ones do not want a market they want absolute control and power.
Billionaires are in the process of dismantling capitalism and replacing it with a feudal system. With themselves as the Lord's and machines is the peasantry. They will have a handful of scribes in the form of engineers keeping the machines running and a han
Re: (Score:2)
That will not work.
Billionaires are spending trillions (Score:2)
To make it happen. You need to come up with a better answer than "that won't work".
Explain to yourself why it won't work. If you can't do that then you are just coping with the coming crisis.
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That might be the pitch, but it's far from clear that the cost of AI will be less than...paying wages. AI products are NOT CHEAP, despite all the "free" loss leader AI chatbots like ChatGPT. For business use, each purpose-specific AI requires steep subscription fees, often paid per token.
I don't think they care about cost (Score:2)
It's not about cost it's about dependency. As it stands if you're a billionaire you are completely dependent on employees and consumers for your wealth and prestige and power
They don't like that. They don't like that at all.
So they are more than happy to spend more resources especially since they have unlimited resources because we let them have unlimited resources.
When I say that they are dismantling capitalism this is what I mean. It means that profit and loss are no longer the driving motivat
ChatGPT, how does credit become money? (Score:1)
**A Market Theory of Money (Oxford, 1989)** â" longer exposition of the same idea
* In this later book Hicks develops the âoecredit â' moneyâ story in more detail: how a creditorâ(TM)s acceptance of a **bankâ(TM)s promise to pay** effectively turns that promise into âoequasi-moneyâ and, as acceptance widens, into money proper. A representative sentence from the book (OCR/snippet) reads: *âoeâ¦he accepts the bank's promise to pay as
Re: ChatGPT, how does credit become money? (Score:1)
Can you reformat that point in plain ASCII?
here is just Point 2, stripped down to plain ASCII, ready for Slashdot posting:
From John Hicks, A Market Theory of Money (1989):
"He accepts the bank's promise to pay as being as good as money. At first there may be confidence only within a narrow circle. But as time goes on, the circle widens. The bank notes become a quasi-money, and eventually come into general use."
Meaning in one sentence:
Credit becomes money when enough people trust and accept the promise as pay
Re: (Score:2)
This is actually pretty old. There are no working safeguards in place. Maybe when the current AI hype crashes half of the world economy when it ends, we may get those safeguards. Or not.
Re: ChatGPT, how does credit become money? (Score:1)
Why fantasize about a devastating crash when the Fed can fix it by simply (virtually) printing enough money to buy the circulating privately created credit, so that ATMs keep working for the little man?
Re: (Score:2)
Are you being serious? I cannot tell. Stupid has been the name of the game too often recently.
If the LLM based AI bubble does pop. (Score:2)
I wonder who will get all these data centers on the cheap.
Re: (Score:2)
It's not if, but when.
Unfortunately, all those data center machines will be obsolete by then, and probably just head for the landfill.
Thats an awful lot of money (Score:2)
Will investors get a return on their investment? I have my doubt's, with the flaws and limitations of AI and ChatGPT are the way they are, it is not completely worthless since I been using it for search queries AI provided some really good well written answers, the best I can predict AI doing is combining with robotics for many menial repetitive tasks like warehouse labor and those robotic dogs seem cool too, and I am sure the military industrial complex is drooling over it too, but since Sam Altman doesn't
Long con (Score:5, Interesting)
How do I get a job tricking wealthy people into giving me billions of dollars for a technology with no real end game?
Re: Long con (Score:2)
Step 1: join Y Combinator.
Re: (Score:2)
Tell them that in 2 years you'll reach AGI. And 2 years later, in 2024, tell them again.
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Including some "redefinitions" of AGI. Stupid assholes with lots of money.
Re: Long con (Score:2)
But they aren't using money they've accumulated. They're borrowing this money.
Re: (Score:1)
Is it "wealthy people" or decision makers at Meta, Google, Amazon, etc? GPUs were bought, datacenters built out, on potential demand. There was an article a while back that mentioned how the mag7 didn't want to be in a situation where customers were demanding computing power and not be able to supply it. But somewhere salesmen overhyped AI, spent a fortune, now have a gigantic bill that has to be paid for and nobody knows how it'll happen. Decision makers way overestimated how much LLMs were worth, then ess
With a simple sales pitch (Score:2)
Tell them, "I got an invention that'll eliminate half of all the jobs in the world, then my investors get to keep all the money we used to pay them!"
Re: (Score:2)
Indeed. For some reason the idea of slaves (whether humans or machines) also sells really well to some people of low/negative worth as persons, some with tons of money.
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Oh wow, sign me up for your newsletter on the emancipation of washing machines.
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Do you think about what you write or do you just regurgitate all slop that comes to your mind?
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Just tell me if you're seriously worried that using AI constitutes enslavement.