The Wall Street Journal reports Sam Altman, CEO of OpenAI, is keen on fundraising with governments in the Middle East, among others, for an effort focused on making the chips needed to fulfill his vision of an AI revolution.
To call this view “capital intensive” is an understatement.
The Journal reports that Altman thinks the project will need to raise as much as $7 trillion.
Data from S&P Global Market Intelligence and Pitchbook (via The Financial Times) at the end of last year was less than $3 trillion in “dry powder” — or money paid out, but not yet used — available across the universe of private equity and venture capital funds.
Certainly, Altman's discussion with oil-rich governments looking for new ways to invest these successes shows a clear awareness that these lofty ambitions require an entrepreneur to think bigger than two sources of corporate capital, always looking for unrelated returns. Expanding the umbrella of alternative assets.
This dry powder napkin math — about $2.6 trillion is sitting in PE, close to $300 billion in VC — and global power brokers can use private debt, off-balance sheet investments and all sorts of other arrangements that few companies can explore. Get paid where needed. Of course, tax efficiently.
But after about a year and a half of AI development that has captivated investors and the corporate world, the debate among industry leaders about what it takes for the technology to fulfill its full potential has risen dramatically in line with our first market valuation. Nvidia ( NVDA ), Microsoft ( MSFT ), AMD ( AMD ) and other round winners.
Good old-fashioned stock market investors can take solace in Josh Shaffer's report that focusing too much on a few names won't doom the market as a whole. After all, there are hundreds — 493 to be exact — of other companies and industries that can pick up the slack from these leaders when the economic cycle rolls around.
Outside the relatively static world of megacap stocks, however, ambitions tied to the rise of AI seem artificially the upper bound of possibility.