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OpenAI doesn't have $500 billion in commitments lined up, it's promising to spend that much over 5 years... That's a helluva big difference than having $500B in
by greedo 11mo ago
OpenAI doesn't have $500 billion in commitments lined up, it's promising to spend that much over 5 years... That's a helluva big difference than having $500B in revenue incoming.
- Tycho 11mo agoCommitments here means money that people have agreed to lend them in future.
- staticman2 11mo agoDoes it mean have agreed to lend them in a binding agreement that OpenAI can sue to enforce?
- Tycho 11mo agoYes. The capital is not needed immediately, but they have agreed to provide it if/when called upon in future.
- greedo 11mo agoThis is highly unlikely. Imagine OpenAI struggling, and in year 4 of this "commitment" call upon the lenders to provide over $100B in capital. The lenders will definitely have recourse if the risk is too high. Otherwise this would simply be a commercial line of credit, or they would be investing the funds directly in OpenAI now.
- Tycho 11mo agoThe contract would obviously not be no strings attached.
- __turbobrew__ 11mo agoData centers take time to build. The capital investment to build these DCs is needed now in expectation that future revenue streams will pay for that capital.
- greedo 11mo agoThat's not what OpenAI announced. They said initial spend would be $100B, and I'm sure until the ink is dry on each contract, that they can change their mind at any time. No business is going to be placing ironclad commitments four years out.