OpenAI, the San Francisco-based company behind ChatGPT, is making one of the largest technology purchases in history, reportedly committing to hundreds of billions of dollars’ worth of advanced computer chips as part of its aggressive artificial intelligence expansion. The orders, placed in less than a month, amount to roughly 26 gigawatts of processing power — equivalent to more than 10 million high-end data processors — from Nvidia, AMD, and Broadcom. According to analysts, the combined power demand from these chips could rival that of 20 nuclear reactors.
Industry experts say the staggering scale of these commitments poses serious financial challenges. “They will need hundreds of billions of dollars to live up to their obligations,” said Gil Luria, managing director at financial consultancy D.A. Davidson. Despite generating around $13 billion in annual revenue, OpenAI is not expected to become profitable until 2029 and is already forecasting significant losses this year.
OpenAI has not disclosed how it plans to finance these purchases. However, co-founder Greg Brockman told CNBC that the company is exploring “creative financing mechanisms” to build the computing infrastructure required to meet surging global demand for AI services.
Chipmakers themselves are reportedly adopting unconventional approaches to secure their relationships with the fast-growing firm. Nvidia has announced plans to invest up to $100 billion in OpenAI over several years to develop one of the world’s largest AI infrastructures. Under the arrangement, OpenAI would use those funds to purchase Nvidia’s own chips — a “circular financing” model that allows Nvidia to recoup its investment while maintaining a strategic foothold in the AI race.
AMD, meanwhile, has offered OpenAI the option to acquire equity in its company — a move that analysts interpret as an attempt to capitalize on OpenAI’s high-profile market position. “It represents another unhealthy dynamic,” said Luria, arguing that AMD’s strategy reflects its struggle to compete with Nvidia’s dominance.
The stakes for OpenAI are enormous. “Sam Altman has the power to crash the global economy for a decade or take us all to the promised land,” wrote Bernstein Research analyst Stacy Rasgon in a recent note to investors. With OpenAI valued at $500 billion, even selling equity would not cover its projected chip commitments, meaning the firm may need to seek debt financing — possibly using the chips themselves as collateral.
While rivals like Google and Meta can rely on advertising profits to fund their AI ambitions, OpenAI must depend on external investors and partnerships. Some analysts warn the spending spree resembles the late-1990s dot-com bubble, though others believe the comparison is overstated. “There is very real demand today for AI,” said Josh Lerner, a Harvard Business School professor, adding that OpenAI’s rapid growth and over 800 million ChatGPT users justify its bold strategy — even if the risks remain high.
