Without hiring investment banks or law firms, OpenAI “independently completed” a transaction worth as much as $1.5 trillion, “focusing on computing power; financial details to be discussed later.”
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OpenAI CEO Sam Altman and his core executive team led the completion of a chip supply deal worth as much as $1.5 trillion with minimal involvement from external advisors, a highly unconventional move that has attracted market attention.
On October 26, according to the Financial Times, Altman largely bypassed OpenAI’s investment bankers and legal team when negotiating multi-year chip and computing infrastructure supply agreements with companies such as Nvidia, Oracle, AMD, and Broadcom, instead relying on President Greg Brockman, CFO Sarah Friar, and newly appointed head of infrastructure financing Peter Hoeschele and other key team members.
Citing sources, the report revealed that the team prioritized the technical aspects of the chip deals, with financial details to be "discussed later". The core logic behind this unconventional approach was "speed above all." From the $11.9 billion compute-for-equity model pioneered with CoreWeave, to the $350 billion chip procurement commitment with Nvidia, and taking over Oracle’s $300 billion data center project, OpenAI has demonstrated astonishing execution efficiency.
Analysts point out that behind this huge gamble lies the urgency of the AI arms race, which has overwhelmed traditional commercial prudence. When asked about the deal details, OpenAI’s attitude seems to be "get the chips first, talk about the rest later", with financial and legal issues to be clarified later on. This bold and risky approach both reflects the tech industry's immense demand for AI computing power and leaves Wall Street investment bankers as mere bystanders in this trillion-dollar feast.
Core Team Leads Deal Structure
According to people close to the company, Altman described his grand vision for these collaborations to Friar and Brockman, with their small team responsible for specific structural design and governance arrangements.
"Sam is the visionary, but Greg and his team are the ones who truly pull these deals together," said one person close to the company. "He’s low-key and works behind the scenes, but when things get complicated, Greg is the driver."
Brockman joined OpenAI as a founding team member in 2015, previously serving as CTO of fintech company Stripe after dropping out of MIT to join the startup.
Friar joined OpenAI last year from social networking app Nextdoor, where she previously served as CEO. Sources cited in the report said she has also been a "very strong voice" in the deals, responsible for ensuring the transactions ultimately win financing support from startups.
Friar was once an equity research analyst at Goldman Sachs and held senior finance positions at Salesforce and payments group Block. In 2021, she led Nextdoor’s $4.3 billion SPAC IPO, though the stock has since dropped as much as two-thirds.
A small team led by former Deloitte consultant Hoeschele is responsible for boosting compute supply to realize Altman’s ambition of one gigawatt per week. The report states that, according to sources, they handle the details of recent partnerships.
Replication and Expansion of the CoreWeave Model
According to insiders, the deals OpenAI has negotiated stemmed from the model first tested in March this year with AI cloud service provider CoreWeave.
OpenAI signed an $11.9 billion agreement to purchase compute from CoreWeave, in exchange for $350 million in CoreWeave equity. That contract has since expanded to more than $22 billion, and the data center operator's share price has tripled.
Sources said in many cases, later deals started with chip companies proactively approaching OpenAI seeking cooperation. These open-ended agreements relied on trust between Altman and his negotiating counterparts.
A person familiar with the situation said Altman turned to direct staff instead of advisors to simplify the deal process and make negotiations less adversarial.
Direct Talks with Chip Giants
According to sources close to both companies, neither Nvidia nor OpenAI sought external advice when reaching their deal.
Under this agreement, Nvidia agreed to invest up to $100 billion in OpenAI, in exchange for OpenAI spending as much as $350 billion on 10GW of chips. One person close to the deal said:
"Sam and Jensen (Nvidia CEO Jensen Huang) have a long-standing relationship and talk frequently; that deal heavily depended on the two of them."
The deal with AMD was reached after several years of discussions about designing new chips specifically for OpenAI. According to the report, an involved party said AMD CEO Lisa Su "tried again and asked what terms we could agree on."
AMD granted the startup warrants to purchase up to 10% of the company at just one cent per share as compensation for buying 6GW of chips. Law firm Sullivan & Cromwell advised OpenAI on the equity structure.
Meanwhile, OpenAI's $300 billion five-year partnership with Oracle began by chance.
According to sources cited in the report, in mid-2024, Oracle's cloud infrastructure unit head Clay Magouyrk contacted OpenAI after a data center in Abilene, Texas, lost its original customer, and OpenAI quickly snapped up the site.
Altman is also expanding his advisory team. In September, he hired former xAI CFO Mike Liberatore as OpenAI’s business finance officer, leading funding efforts for advancing AI infrastructure; he is expected to play a key role in future deals.
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