It's an admission that they think it's quite likely they go bust. Of course they'll try to put the taxpayer on the hook, without giving much upside back if they succeed.
I think its an obvious escape hatch: oh well they told us we dont get all the money we need so thats why AI sucks... economy will collapse now and its everyone elses fault except us
I don't get why they are trying so hard to keep this from the front page, they're doing everything they can to nerf it. It's all over the internet at this point.
Edit: Streisand effect this clownery, show them how the internet works.
If the government wanted to pump USD$1T into the economy, is investment into a stack of sheds full of rapidly depreciating computers the most effective use of USD$1T?
Some example contrasting options:
- Worldwide investment in 300mm wafer fab equipment is projected to be USD$107-138B per year through to 2028.[1] USD$1T buys 100% of the global production of 300mm wafer fab equipment for about 7 years.
- European Union countries are projected to spend approximately USD$250B on electricity generation and transmission infrastructure projects in 2025.[2] The US is projected to spend a similar amount.[3] China is projected to spend approximately USD$460B.[4] USD$1T buys 4 years worth of European Union or US expenditure on electricity generation and transmission infrastructure, or 2 years worth of Chinese expenditure.
- Worldwide biopharmaceutical R&D was estimated to amount to USD$276B in 2021.[5] More conservative estimates include USD$102 in 2024.[6] Using the larger estimate, USD$1T buys 3.5 years of global biopharmaceutical R&D.
I know it's very unpopular on HN to give the benefit of the doubt to either OpenAI or to the US Government. I'll do it anyway, torpedoes be damned.
First, the $1T number seems to be completely pulled out of thin air. There were recent speculations that OpenAI is working on an IPO at the level of $1T, but obviously this has nothing to do with US loan guarantees of $1T. The talk about US loan guarantees originated with the WSJ interview of the OpenAI CFO, Sarah Friar. She was very clear that she can't give any details, because nothing is concrete yet. She did not mention any numbers, at all. The $1T is pure speculation, based on nothing.
Second, Sarah Friar mentioned that the US Government is very receptive to the entire sector, and OpenAI is always consulted. But OpenAI is not lobbying the government for loan guarantees for themselves only. If there are any such loan guarantees (which is very likely), they'll be for AI investments in the US in general, so, for example, Anthropic and Google will also benefit (and probably Nvidia, AMD, Intel, Oracle, Amazon, Meta, etc).
Third, Sarah Friar used the word "backstop", instead of loan guarantees. This might sound like a synonym, but I don't think it is. She emphasized that the financing will be organized by the private industry; the government backstop is there to facilitate that. How could such a backstop look, so it is most efficient for both the taxpayers and for the investors (most of which are also taxpayers)? It could be some first loss tranches in some pools of loans, for example the first 10%. This way, the industry can raise $10BN, while the government is on the hook for only $1BN. Even more likely, the government will provide second loss backstop (the technical term is a "mezzanine tranch"). For example, they'll absorb the losses between 5% and 15% in a loan portfolio. The first loss will be absorbed by some speculative investors, who will be compensated by a very generous yield.
I also expect that new loans will only be raised if old loans perform well. Overall, I don't expect the US government to be on the hook for $1T at any given time, and I would be surprised if they'll be on the hook for much more than $1 BN at any given time.
Indeed a world in which you can't tell truth from lies and proof from ai generated videos suits this administration perfectly. Masked men with no identification kidnap people off the streets and you can't tell if it's real or fake. No wonder the government loves openai. Just look at how happy they are to use it on truth social.
> If there are any such loan guarantees (which is very likely), they'll be for AI investments in the US in general, so, for example, Anthropic and Google will also benefit (and probably Nvidia, AMD, Intel, Oracle, Amazon, Meta, etc).
so, if we say there is AI bubble, now whole sector of ultrarich will rob taxpayers, not just single controversial company.
Federal loan guarantees, aka the equivalent of a Fannie Mae/Freddie Mac style backstop that fuelled the reckless lending and opaque securitization of mortgages that led to the 2008 crisis.
Altman tweeted that the stuff in that article isn't right. Expcerts:
>we do not have or want government guarantees for OpenAI datacenters
>What we do think might make sense is governments building (and owning) their own AI infrastructure
>The one area where we have discussed loan guarantees is as part of supporting the buildout of semiconductor fabs in the US, where we and other companies have responded to the government’s call and where we would be happy to help (though we did not formally apply)
"At some level, when something gets sufficiently huge, whether or not they are on paper, the federal government is kind of the insurer of last resort, as we’ve seen in various financial crises and insurance companies screwing things up. I guess, given the magnitude of what I expect AI economic impact to look like, I do think the government ends up as the insurer of last resort."
does anyone have the slightest idea on how much open AI is currently earning in terms of revenue per quarter vs how much money they are actually burning per quarter? What is their userbase? 1 billion? What is the upside basically is my question
Going public is a one-shot deal to pay off investors and bring in new capital. Companies will prefer to do that when there is less uncertainty in the markets currently due to the tariffs, government shutdown, impending expiry of healthcare insurance premiums and personal income tax cuts.
OAI's target IPO is forecasted to be the largest ever, so if that flopped, it would cast doubt over its long term profitability.
A chat bot or a the best surveillance tool ever created ? People are feeding these llm their entire life, you don't need to scrape 20 systems to get a good profile anymore
people also feeding these all kinds of bullshit. You can tell it anything, even that you was first person on the moon, and it will affirm it without a doubt.
not the best survelliance when it's based on arbitrary input...
It would be utterly nonsensical for the US to take this deal. The easy alternative would be to subsidize GPU datacenter buildouts on favorable terms with nvidia/accelerator providers. OpenAI/Anthropic amd everyone else could then competitively bid on access.
I guarantee you that openai would leverage this deal to the gills and come back for more.
Nonsensical for the US, but not necessarily nonsensical for Donald Trump and his family, depending on what Altman can offer him. Maybe not a 747, but he could certainly arrange to purchase Trumpcoin, like the UAE did to invest in Binance.
When you have the most openly corrupt administration in modern US Presidential history, the interests of the nation are not the yardstick to use to measure the value of a deal.
which you mean, like if there is no such product where people confide because it ran out of money and gov didn't help? or if it survived without gov help and can there fore say "f you, we won't backdoor" apple style when asked for data?
I've been using the gpt-oss 20b parameter model on my laptop and it works great. Doesn't reject giving legal or medical advice either. Obviously not good enough for coding, but seems like 'useful AI assistant for daily life' is in overshoot.
Somewhere a doctor is happy he found a model that's good enough for coding but he thinks, I'm certainly not dumb enough to use this for medical advice.
The thing about medical advice is that Google was useful for narrowing problems down, and it's the same with any current LLM only more useful. I have enough biology to know what interventions require professional opinions.
That’s great, but not a reason for taxpayers to get involved and be on the hook for massive risky investments.
OpenAI doesn’t need government financial backing for investment. The government has more pressing priorities to address with the money they take from us first.
It's interesting because if Trump falls for this, at it fuels an even bigger bubble than is already going and Fed can't lower interest rates, then it will destroy his part in the midterms. If he can't bring down costs and interest rates people are going to freak out, that's clear from the polls. Where most people in the country are at in the moment is a precarious one step away from ruin while watching prices going and interest rates stay. That's not Sam's reality but most people are struggling and if Sam hordes all the resources to him, people are going to revolt.
The Open in Open AI maybe the most inaccurate advertising ever. I am sensing they realised there is no way of making the cash they need to keep going, just by providing what they currently provide, and I am not remotely upset by that. Sam Altman was never the saviour or god that many foolishly thought and thankfully it hasn't taken long to be clear.
You think that Trump won't demand something in return for this?
I keep telling everyone I know that AI will be enshitified just like every other internet business. Tell me why the incentives will be different this time around.
Putting yourself in hock to an aspiring authoritarian is certainly one way to supercharge that process.
It's an admission that they think it's quite likely they go bust. Of course they'll try to put the taxpayer on the hook, without giving much upside back if they succeed.
Socialize the risks, privatize the profits.
I think its an obvious escape hatch: oh well they told us we dont get all the money we need so thats why AI sucks... economy will collapse now and its everyone elses fault except us
I don't get why they are trying so hard to keep this from the front page, they're doing everything they can to nerf it. It's all over the internet at this point.
Edit: Streisand effect this clownery, show them how the internet works.
If the government wanted to pump USD$1T into the economy, is investment into a stack of sheds full of rapidly depreciating computers the most effective use of USD$1T?
Some example contrasting options:
- Worldwide investment in 300mm wafer fab equipment is projected to be USD$107-138B per year through to 2028.[1] USD$1T buys 100% of the global production of 300mm wafer fab equipment for about 7 years.
- European Union countries are projected to spend approximately USD$250B on electricity generation and transmission infrastructure projects in 2025.[2] The US is projected to spend a similar amount.[3] China is projected to spend approximately USD$460B.[4] USD$1T buys 4 years worth of European Union or US expenditure on electricity generation and transmission infrastructure, or 2 years worth of Chinese expenditure.
- Worldwide biopharmaceutical R&D was estimated to amount to USD$276B in 2021.[5] More conservative estimates include USD$102 in 2024.[6] Using the larger estimate, USD$1T buys 3.5 years of global biopharmaceutical R&D.
[1] https://www.trendforce.com/news/2025/10/14/news-2nm-race-dri...
[2] https://www.iea.org/reports/world-energy-investment-2025/eur...
[3] https://www.iea.org/reports/world-energy-investment-2025/uni...
[4] https://www.iea.org/reports/world-energy-investment-2025/chi...
[5] doi:10.1038/d41573-024-00131-2 (https://www.analysisgroup.com/globalassets/insights/publishi...)
[6] https://www.iqvia.com/blogs/2025/06/global-trends-in-r-and-d...
I know it's very unpopular on HN to give the benefit of the doubt to either OpenAI or to the US Government. I'll do it anyway, torpedoes be damned.
First, the $1T number seems to be completely pulled out of thin air. There were recent speculations that OpenAI is working on an IPO at the level of $1T, but obviously this has nothing to do with US loan guarantees of $1T. The talk about US loan guarantees originated with the WSJ interview of the OpenAI CFO, Sarah Friar. She was very clear that she can't give any details, because nothing is concrete yet. She did not mention any numbers, at all. The $1T is pure speculation, based on nothing.
Second, Sarah Friar mentioned that the US Government is very receptive to the entire sector, and OpenAI is always consulted. But OpenAI is not lobbying the government for loan guarantees for themselves only. If there are any such loan guarantees (which is very likely), they'll be for AI investments in the US in general, so, for example, Anthropic and Google will also benefit (and probably Nvidia, AMD, Intel, Oracle, Amazon, Meta, etc).
Third, Sarah Friar used the word "backstop", instead of loan guarantees. This might sound like a synonym, but I don't think it is. She emphasized that the financing will be organized by the private industry; the government backstop is there to facilitate that. How could such a backstop look, so it is most efficient for both the taxpayers and for the investors (most of which are also taxpayers)? It could be some first loss tranches in some pools of loans, for example the first 10%. This way, the industry can raise $10BN, while the government is on the hook for only $1BN. Even more likely, the government will provide second loss backstop (the technical term is a "mezzanine tranch"). For example, they'll absorb the losses between 5% and 15% in a loan portfolio. The first loss will be absorbed by some speculative investors, who will be compensated by a very generous yield.
I also expect that new loans will only be raised if old loans perform well. Overall, I don't expect the US government to be on the hook for $1T at any given time, and I would be surprised if they'll be on the hook for much more than $1 BN at any given time.
Indeed a world in which you can't tell truth from lies and proof from ai generated videos suits this administration perfectly. Masked men with no identification kidnap people off the streets and you can't tell if it's real or fake. No wonder the government loves openai. Just look at how happy they are to use it on truth social.
> If there are any such loan guarantees (which is very likely), they'll be for AI investments in the US in general, so, for example, Anthropic and Google will also benefit (and probably Nvidia, AMD, Intel, Oracle, Amazon, Meta, etc).
so, if we say there is AI bubble, now whole sector of ultrarich will rob taxpayers, not just single controversial company.
Federal loan guarantees, aka the equivalent of a Fannie Mae/Freddie Mac style backstop that fuelled the reckless lending and opaque securitization of mortgages that led to the 2008 crisis.
Altman tweeted that the stuff in that article isn't right. Expcerts:
>we do not have or want government guarantees for OpenAI datacenters
>What we do think might make sense is governments building (and owning) their own AI infrastructure
>The one area where we have discussed loan guarantees is as part of supporting the buildout of semiconductor fabs in the US, where we and other companies have responded to the government’s call and where we would be happy to help (though we did not formally apply)
and some other stuff https://x.com/sama/status/1986514377470845007
By the way, on the other side we have:
Tyler Cowan podcast:
"At some level, when something gets sufficiently huge, whether or not they are on paper, the federal government is kind of the insurer of last resort, as we’ve seen in various financial crises and insurance companies screwing things up. I guess, given the magnitude of what I expect AI economic impact to look like, I do think the government ends up as the insurer of last resort."
https://conversationswithtyler.com/episodes/sam-altman-2/
I really need to read up on how a non profit took donations and converted them into a company owned by individuals, then IPO.
does anyone have the slightest idea on how much open AI is currently earning in terms of revenue per quarter vs how much money they are actually burning per quarter? What is their userbase? 1 billion? What is the upside basically is my question
There's been quite a few videos on youtube about the creative accounting going on where Nvidia funds OpenAI to buy stuff from Nvidia, etc.
Like snakes eating their own tail. If you or I did it, we'd go to jail.
https://www.youtube.com/watch?v=CBCujAQtdfQ
But the big end of town apparently thinks it's worth a government investment of a trillion dollars for all that repackaging of stolen content.
It'd be really interesting to see how the books actually look. I'm guessing it's not pretty.
This is insane. I'd be shocked if they aren't trying to bribe the admin right now.
Don't get it. Especially when I see competing model providers. What makes OpenAI special?
As a private person you can't even buy any upside into it directly. Without equity why would the US govt ever take a deal like this?
I don’t know if you’ve seen who runs the US government at the moment.
it depends how much they donate to the golden ballroom!
Privatize profits socialize risks. This is not capitalism, this is just old-fashion feudalism with a new technological aristocracy on top.
> Friar dismissed speculation that OpenAI might soon go public, saying an IPO “is not on the cards right now.”
I thought the whole point of going public was to tap the broader market for liquidity? Maybe they should SPAC lol.
Going public is a one-shot deal to pay off investors and bring in new capital. Companies will prefer to do that when there is less uncertainty in the markets currently due to the tariffs, government shutdown, impending expiry of healthcare insurance premiums and personal income tax cuts.
OAI's target IPO is forecasted to be the largest ever, so if that flopped, it would cast doubt over its long term profitability.
When OpenAI goes public that will be the sign that they need to pass the baton to the retail invest--I mean--bag-holders.
?
Wasn’t that just in the news?
In an era where the working poor are struggling to buy groceries and pay rent, these clowns want government money to make a better chat bot.
What a complete circus.
A chat bot or a the best surveillance tool ever created ? People are feeding these llm their entire life, you don't need to scrape 20 systems to get a good profile anymore
people also feeding these all kinds of bullshit. You can tell it anything, even that you was first person on the moon, and it will affirm it without a doubt.
not the best survelliance when it's based on arbitrary input...
If the excuse is to compete w china, I say just let china win.
Same, I think that people in tech underestimate how any people will be. It'll bring down the industry
It would be utterly nonsensical for the US to take this deal. The easy alternative would be to subsidize GPU datacenter buildouts on favorable terms with nvidia/accelerator providers. OpenAI/Anthropic amd everyone else could then competitively bid on access.
I guarantee you that openai would leverage this deal to the gills and come back for more.
Nonsensical for the US, but not necessarily nonsensical for Donald Trump and his family, depending on what Altman can offer him. Maybe not a 747, but he could certainly arrange to purchase Trumpcoin, like the UAE did to invest in Binance.
When you have the most openly corrupt administration in modern US Presidential history, the interests of the nation are not the yardstick to use to measure the value of a deal.
Nonsensical incompetence m has been the theme of this entire administration
What if the government wants to snoop. Then they want to "help out" product where people confide the most private stuff. Strings attached.
What do you think is stopping them from snooping regardless?
which you mean, like if there is no such product where people confide because it ran out of money and gov didn't help? or if it survived without gov help and can there fore say "f you, we won't backdoor" apple style when asked for data?
I've been using the gpt-oss 20b parameter model on my laptop and it works great. Doesn't reject giving legal or medical advice either. Obviously not good enough for coding, but seems like 'useful AI assistant for daily life' is in overshoot.
Somewhere a doctor is happy he found a model that's good enough for coding but he thinks, I'm certainly not dumb enough to use this for medical advice.
The thing about medical advice is that Google was useful for narrowing problems down, and it's the same with any current LLM only more useful. I have enough biology to know what interventions require professional opinions.
That’s great, but not a reason for taxpayers to get involved and be on the hook for massive risky investments.
OpenAI doesn’t need government financial backing for investment. The government has more pressing priorities to address with the money they take from us first.
Totally agree to be clear.
I’m guessing the grandparent poster would agree with you.
If 20B reasoning models are the goal, we can do that a whole lot cheaper than for $1T.
Is this all part of the sequel to the horse ebooks / bear stearns bravo ARG?
Not a financial expert but won't this massively inflate prices wherever open spends it? e.g Energy?
Presumably $1.4T has to get spent somewhere. If that $1.4T results in productivity gains of $1.4T, there wouldn’t be overall inflation.
If that $1.4T doesn’t have any actual returns for a few years, I would expect significant inflation from what is effectively a stimulus.
It's interesting because if Trump falls for this, at it fuels an even bigger bubble than is already going and Fed can't lower interest rates, then it will destroy his part in the midterms. If he can't bring down costs and interest rates people are going to freak out, that's clear from the polls. Where most people in the country are at in the moment is a precarious one step away from ruin while watching prices going and interest rates stay. That's not Sam's reality but most people are struggling and if Sam hordes all the resources to him, people are going to revolt.
very bearish for vibes
The Open in Open AI maybe the most inaccurate advertising ever. I am sensing they realised there is no way of making the cash they need to keep going, just by providing what they currently provide, and I am not remotely upset by that. Sam Altman was never the saviour or god that many foolishly thought and thankfully it hasn't taken long to be clear.
You think that Trump won't demand something in return for this?
I keep telling everyone I know that AI will be enshitified just like every other internet business. Tell me why the incentives will be different this time around. Putting yourself in hock to an aspiring authoritarian is certainly one way to supercharge that process.
No