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Altman said OpenAI may be the most important company

Silicon

Valley's history-sources

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How OpenAI will pull off costly infrastructure ambitions

remains

unclear

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Altman says company needs to get to hundreds of billions a

year

in revenue

By Deepa Seetharaman

SAN FRANCISCO, Oct 29 - Soon after ChatGPT was released

to the public in late 2022, OpenAI CEO Sam Altman told employees

they were on the cusp of a new technological revolution.

OpenAI could soon become "the most important company in the

history of Silicon Valley," Altman said, according to two former

OpenAI employees who heard his remarks.

There is no shortage of ambition in the U.S. tech industry.

Meta boss Mark Zuckerberg and Amazon ( AMZN ) founder

Jeff Bezos often speak of transforming the world. Tesla

head Elon Musk aims to colonize Mars.

Even by those standards, Altman's aspirations stand out.

After reaching a deal with Microsoft ( MSFT ) on Tuesday that

removes limits on how OpenAI raises money, Altman laid out even

more ambitious plans to build out AI infrastructure to meet

growing demand for tools powered by AI.

On a livestream on Tuesday, Altman said OpenAI was committed to

developing 30 gigawatts of computing resources for $1.4

trillion. Eventually, he said he would like OpenAI to be able to

add 1 gigawatt of compute every week - an astronomical sum given

that each gigawatt currently comes with a capital cost of more

than $40 billion. Altman said over time, capital costs could

halve, without saying how.

"AI is a sport of kings," said Gil Luria, an analyst at D.A.

Davidson. "Altman understands that to compete in AI he will need

to achieve a much bigger scale than OpenAI currently operates

at."

But Altman has offered few details on how he might accomplish

his biggest ideas.

Altman has previously said OpenAI is exploring a range of

creative financing options. OpenAI also has struck a series of

unusual, seemingly circular deals with public companies like

Nvidia ( NVDA ). The transactions have drawn criticism that

they create the illusion of more growth than is realistic,

raising the specter of an AI bubble.

TRILLIONS OF DOLLARS NEEDED

In January, Altman flew to the White House to announce

Stargate, a $500 billion AI infrastructure project the company

is working on with Oracle, SoftBank, Nvidia ( NVDA )

and cloud provider CoreWeave ( CRWV ).

Standing next to U.S. President Donald Trump, who he had once

criticized as "irresponsible", Altman said the initiative would

create hundreds of thousands of jobs. "We wouldn't be able to do

this without you, Mr. President," he said.

At the time, Altman said Stargate would build 10 GW of data

center capacity, which has now tripled as per his comments on

Tuesday.

Those plans are just the start, Altman said. To support the

massive investment, he said, "eventually we need to get to

hundreds of billions a year in revenue."

That would require OpenAI - expected to hit an annual run

rate of $20 billion in revenue by year-end - to grow at 10 times

its current pace.

PATH TO IPO

ChatGPT sparked the AI craze, forcing Big Tech to spend

billions of dollars to keep up. Altman has since steered OpenAI

from a nonprofit devoted to AI research to a $500 billion

company that is trying to develop AI systems so powerful they

could fundamentally alter society.

Altman, who briefly contemplated a run for California

governor in 2017, does not hold equity in OpenAI and earns just

$76,000 a year from the company. The bulk of his net worth comes

from his investments in major tech companies, including Stripe,

Airbnb ( ABNB ) and, more recently, a litany of startups seeking

to make money on the AI boom sparked by OpenAI.

Even in his 20s, he was a force. In 2008, Paul Graham, who

founded Y Combinator, summed up a then 23-year-old Altman: "You

could parachute him into an island full of cannibals and come

back in five years and he'd be the king."

Altman, now 40, succeeded Graham as the startup

accelerator's president in 2014.

Tuesday's restructuring news, along with Altman's comment

that an initial public offering is the most likely path for

OpenAI, suggests Altman is readying to finance his grander

ambitions.

In pursuit of his goals, Al​​tman has made a few enemies,

including billionaire Musk, an OpenAI co-founder and early

backer who left the company in 2018.

Musk has sued OpenAI, saying it has digressed from its

nonprofit goals of developing AI for humanity. He has also

criticized the Stargate project as lacking funding.

This spring, several former OpenAI employees supported Musk's

lawsuit, arguing that Altman could not be trusted to prioritize

public safety over profits.

Two years ago, Altman was ousted from OpenAI after falling out

with the board. He was reinstated a few days later.

That period will be the subject of a Hollywood movie,

"Artificial", which is scheduled for release next year. Actor

Andrew Garfield, who played Facebook co-founder Eduardo Saverin

in "The Social Network," will star as Altman, IMDb says.