OpenAI's $100 Billion Backup Server Investment Signals Massive AI Infrastructure Expansion

OpenAI to spend $100 billion over five years on backup servers, the Information reports

Sept 19 (Reuters) - OpenAI plans to spend about $100 billion renting backup servers from cloud providers over the next five years, the Information reported on Friday, citing company executives' discussions with shareholders. This expenditure is in addition to the $350 billion the artificial intelligence firm has already projected to spend on server rentals from cloud providers this year through 2030, the report said. Companies are spending hundreds of billions of dollars to secure supply-constrained computing capacity as they race to develop the most sophisticated AI models, benefiting cloud service providers and chipmakers. Including the backup servers, OpenAI plans to spend about $85 billion a year on server rentals over the next five years, on average, the report said citing the company's private projections. OpenAI did not immediately respond to a Reuters request for comment. OpenAI executives say the servers are "monetizable" because they will help the company gain additional revenue it has not yet included in projections, either by powering research breakthroughs or a surge in product usage, the report said. The ChatGPT creator expects to burn around $115 billion in cash through 2029 as it ramps up spending to power its artificial intelligence models, the Information reported earlier this month. Reporting by Zaheer Kachwala and Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid Our Standards: The Thomson Reuters Trust Principles., opens new tab

OpenAI to spend $100 billion over five years on backup servers: Report - The Economic Times

OpenAI plans to spend about $100 billion renting backup servers from cloud providers over the next five years, the Information reported on Friday, citing company executives' discussions with shareholders. This expenditure is in addition to the $350 billion the artificial intelligence firm has already projected to spend on server rentals from cloud providers this year through 2030, the report said. Companies are spending hundreds of billions of dollars to secure supply-constrained computing capacity as they race to develop the most sophisticated AI models, benefiting cloud service providers and chipmakers. Including the backup servers, OpenAI plans to spend about $85 billion a year on server rentals over the next five years, on average, the report said citing the company's private projections. OpenAI did not immediately respond to a Reuters request for comment. OpenAI executives say the servers are "monetizable" because they will help the company gain additional revenue it has not yet included in projections, either by powering research breakthroughs or a surge in product usage, the report said. The ChatGPT creator expects to burn around $115 billion in cash through 2029 as it ramps up spending to power its artificial intelligence models, the Information reported earlier this month.

OpenAI projects $100 billion spend on backup servers, The Information reports By Investing.com

Investing.com -- OpenAI will spend an additional $100 billion on backup server rentals over the next five years in a bid to safeguard its position at the forefront of artificial intelligence, The Information reported. This massive outlay complements the $350 billion the company has already projected for server rentals through 2030 as it scales infrastructure to meet potential surges in demand. The financial scope signals CEO Sam Altman's conviction that computing power will be the prime differentiator in the AI race. Altman has told colleagues he envisions future computing requirements that could exceed the scale of the entire U.S. power grid, reflecting the exponential growth OpenAI expects from AI adoption and breakthroughs. OpenAI executives believe a range of future use cases or unforeseen technical advancements could ignite sudden and dramatic increases in compute needs, people familiar with the matter told The Information. Including the $100 billion in contingency spending, OpenAI expects to allocate an average of $85 billion annually on server rentals over the next five years, a projection that positions it far beyond the infrastructure spend of any individual corporation in the cloud ecosystem. That scale of investment also highlights the company's staggering long-term cash burn. According to The Information, internal projections show OpenAI may consume $115 billion in capital through 2029, with expectations to begin generating positive cash flow only starting in 2030. Still, OpenAI sees potential upside in its contingency plan. Executives have told at least one observer that these additional servers are "monetizable" and could generate incremental revenue not currently factored into forecasts, either from new research deployments or rapid spikes in product footprint. OpenAI anticipates its revenue will grow from $13 billion this year to roughly $200 billion in 2030, fueled primarily by continued demand for ChatGPT. If achieved, that would put OpenAI's top-line performance in line with stalwarts such as NVIDIA Corporation (NASDAQ:NVDA) and Meta Platforms Inc (NASDAQ:META), despite the company's lack of historical profitability. The scale of OpenAI's server demand has energized investor interest in infrastructure providers critical to the AI boom, such as Super Micro Computer Inc (NASDAQ:SMCI), Dell Technologies Inc (NYSE:DELL), and Hewlett Packard Enterprise Co (NYSE:HPE). As OpenAI prepares for a capital-intensive decade ahead, the implications could ripple through cloud providers, power utilities, and the next generation of server manufacturers. With $100 billion earmarked to ensure robustness in its technical backend, the company is placing a long-term bet that scale, not speed, will define the future of artificial intelligence.

OpenAI to spend $100 billion over five years on backup servers, the Information reports

(Reuters) - OpenAI plans to spend about $100 billion renting backup servers from cloud providers over the next five years, the Information reported on Friday, citing company executives' discussions with shareholders. This expenditure is in addition to the $350 billion the artificial intelligence firm has already projected to spend on server rentals from cloud providers this year through 2030, the report said. Companies are spending hundreds of billions of dollars to secure supply-constrained computing capacity as they race to develop the most sophisticated AI models, benefiting cloud service providers and chipmakers. Including the backup servers, OpenAI plans to spend about $85 billion a year on server rentals over the next five years, on average, the report said citing the company's private projections. OpenAI did not immediately respond to a Reuters request for comment. OpenAI executives say the servers are "monetizable" because they will help the company gain additional revenue it has not yet included in projections, either by powering research breakthroughs or a surge in product usage, the report said. The ChatGPT creator expects to burn around $115 billion in cash through 2029 as it ramps up spending to power its artificial intelligence models, the Information reported earlier this month. (Reporting by Zaheer Kachwala and Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)