OpenAI CFO: No plans for an IPO in the short term, market concerns about an AI bubble are overblown, hopes government will guarantee data center financing
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On Wednesday, OpenAI Chief Financial Officer Sarah Friar made it clear that the company has no plans for an IPO in the short term and hopes the US government can provide guarantee support for its data center financing. This statement cooled market expectations for a potential record-breaking listing of the AI giant.
At The Wall Street Journal’s Tech Live conference, Friar emphasized that the company is currently prioritizing growth and R&D over profitability, although it is undergoing structural transformation. She said: “An IPO is not under consideration at the moment. We are constantly adapting the company to our growing scale, and I don’t want to get constrained by IPO matters.” Previous media reports had suggested that OpenAI was discussing the possibility of going public as early as 2027.
Friar revealed that if not for such aggressive investment, OpenAI could have quickly become profitable given the “very healthy” gross margins from its enterprise and consumer businesses. She said, “I am not overly focused on the breakeven moment today. I know that if I have to break even, my profit structure is healthy enough that I could achieve it just by cutting back on investment.”
The company is expected to pay about $600 billion over the coming years in computing power expenses to Oracle, Microsoft, and Amazon, with expected revenues of $13 billion this year. The loss rate surpasses that of almost all startups in Silicon Valley’s history.
The market is overly concerned about an AI bubble and needs more “enthusiasm”
OpenAI CFO Sarah Friar stated that the market’s worries about a potential bubble in artificial intelligence are excessive, and that more “enthusiasm” should be shown for the potential of this technology.
Friar said:
When I think about what AI really means and what it can do for individuals, I don’t think the market is enthusiastic enough about AI. We should keep going all out.
Seeking government support to lower financing costs
As OpenAI raises data center spending to unprecedented levels, the company hopes the federal government will support its expansion by guaranteeing financing for chip deals. Friar pointed out that the depreciation rate of AI chips remains uncertain, making it more expensive for companies to borrow funds needed to purchase them.
She said:
That’s why we’re seeking support from banks, private equity, and even the government ecosystem—to see what way the government can intervene. Any such guarantee “can truly lower financing costs and increase the loan-to-value ratio—meaning the debt that can be taken on top of the equity portion.”
As part of the large-scale chip leasing agreement between OpenAI and Nvidia, Nvidia is in discussions to guarantee part of the loans OpenAI plans to use for building new data centers.
Refuting circular financing concerns; expanding computing power to “national scale”
Regarding concerns over circular financing, she said what OpenAI is doing today is simply building a complete infrastructure to bring more computing power to the world. She utterly disagrees that this is circular financing, and said much of last year’s work focused on supply chain diversification.
Friar also revealed that by the end of this year, OpenAI will have about 2 gigawatts of computing power for training and running AI models, compared to only 200 megawatts two years ago. The company rents most of its computing capacity from Microsoft, Oracle, and CoreWeave, while also building its own data centers.
In describing the scale of computing power OpenAI plans to bring online, she said, “We’re talking about national-scale deployment.” This aggressive expansion plan highlights the inverted economic model of the generative AI sector—building and selling costs far outpace revenue growth.
Enterprise business share rises to 40%
Friar said the company is looking for new growth paths beyond ChatGPT’s subscription business. She emphasized OpenAI’s enterprise sales growth, stating enterprise business now accounts for about 40% of revenue, up from 30% at the beginning of the year. Many enterprise clients are “shifting from pilot to full production,” she noted, mentioning industries such as financial services and healthcare.
OpenAI is currently competing with smaller rival Anthropic for these customers. Although the company is dominant in the consumer market, this also means it must subsidize computing power costs for non-paying ChatGPT users, thereby hurting margins.
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