OpenAI has redefined what momentum and risk look like in the artificial intelligence arms race. In a rapid-fire series of announcements, the company unveiled partnerships involving staggering sums of money and cemented its place at the center of the next wave of machine learning infrastructure. It began with news that Nvidia plans to invest up to $100 billion to help OpenAI build data center capacity. A day later, OpenAI revealed an expanded deal with Oracle and SoftBank, scaling its “Stargate” project to a $400 billion commitment. These plans will require the amount of electricity needed to power more than 13 million U.S. homes, with the total buildout reaching 17 gigawatts. At roughly $50 billion per site, OpenAI’s projects add up to about $850 billion in spending.
OpenAI CEO Sam Altman acknowledged concerns about the market getting overheated but rejected the idea that the spending spree is overkill. “We are growing faster than any business I’ve ever heard of before,” he told CNBC, adding that a network of supercomputing facilities is what’s required to maximize the capabilities of AI. Altman said the biggest bottleneck for AI isn’t money or chips; it’s electricity. He has put money into nuclear companies because he sees their steady output as one of the only energy sources strong enough to meet AI’s enormous demand.
The Financial and Practical Challenges
Current financial projections show OpenAI is on track to generate $125 billion in revenue by 2029, but the buildout is full of execution risk. The company has been burning billions of dollars in cash and is fully reliant on outside capital to grow. Critics have warned of a bubble, pointing to how companies like Nvidia and Microsoft have added hundreds of billions of dollars in market value on the back of their ties with OpenAI. The system, they say, looks like a circular financing model where OpenAI’s partners invest in projects and then get paid back through chip sales and data center leases.
OpenAI CFO Sarah Friar said the company plans to build some of its own first-party infrastructure to become a “savvier operator” and strengthen its position in rate negotiations with vendors. She acknowledged that the buildout will take years to deliver and is dependent on energy and grid upgrades that remain uncertain. Friar said that because there’s “not enough compute to do all the things that AI can do,” a full ecosystem must come together to get it started.
The Race to Dominate the AI Ecosystem
History shows that breakthroughs in AI are driven by access to massive computing power, which is why companies such as OpenAI, Google, and Anthropic are all chasing scale. Accenture CEO Julie Sweet said she’s seeing an inflection point in enterprise adoption, noting that while companies are excited about the technology, most are not yet “AI-ready.” Ali Ghodsi, CEO of Databricks, said concerns about overbuilding miss the bigger picture, and his company has struck a formal integration deal with OpenAI to bring GPT-5 directly into its data tooling.
Despite the massive investments and breakneck growth, Altman has “mixed feelings” about taking the company public. He said he assumes OpenAI will someday be a public company, but he worries that being public could make long-term investments harder due to the need to meet Wall Street’s quarterly expectations. In a surprise move, OpenAI also acquired Jony Ive’s nascent devices startup for about $6.4 billion. While in Texas, Altman hinted at hardware that could reshape how people use computers in their everyday lives, saying that the breakthrough in AI creates the chance to invent an entirely new way of using them.
What The Author Thinks
OpenAI’s infrastructure push is not just about a company building data centers but about laying the physical foundation for a new era of AI-driven society. This move, with its unprecedented scale and reliance on a complex web of partnerships, signals that the company is aiming to be a foundational layer of the digital world, similar to how the internet infrastructure was built. This is an ambitious and high-risk strategy that could either cement OpenAI as a dominant, indispensable force or lead to a spectacular failure if demand, energy, or funding falls short of its ambitious vision. The future of AI is not just in the code, but in the power plants and physical land that will support it, and OpenAI seems determined to own it all.
Featured image credit: Wikimedia Commons
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