OpenAI to press ahead with data-center expansion despite midterm sweep, CFO tells CNBC

Nov 6 : OpenAI will press ahead with its US data-center expansion plans despite a Democratic midterm sweep this week that has fueled fears of tighter scrutiny of the facilities, its Chief Financial Officer Sarah Friar told CNBC in an interview on Friday.

"When I think about the midterms, I need to keep thinking about how do we keep investing to meet customer demand," Friar said. "We are going to keep building out those relationships with communities so we can get the compute we need," she added. 

One of the corporate faces of the AI boom, OpenAI has moved quickly to counter fears that a shift in congressional power could slow the industry's growth. It launched a charm offensive on Thursday to win over communities as opposition to data centers becomes a rallying point for anxieties about the technology.

As part of the efforts, OpenAI said, it will no longer use non-disclosure agreements with public officials when negotiating or discussing future sites. It will also give residents access to construction plans ⁠and their potential effects.

Growing data-center opposition was a crucial issue in the midterm elections. Democratic candidates, including Texas Governor-elect Gina Hinojosa, made tighter scrutiny of the facilities a central campaign pledge. The Lone Star State is one of the fastest-growing data-center regions in the world.

Fears the Democratic sweep may slow construction of the facilities critical to the AI boom wiped about $2.5 trillion off the US stock market on Thursday, as investors weighed the fallout for the chip, cloud and networking industries that have been among the biggest beneficiaries of the spending frenzy.

Still, there are signs that tech giants remain committed to data-center expansion plans despite the growing backlash.

Alphabet-owned Google said on Thursday it would invest $17 billion to build its first data center in Wyoming.

Meanwhile, Bloomberg News reported that ByteDance is considering expanding a data center project in northeastern Brazil, a move that would strengthen its standing as Latin America's leading builder of computing facilities.

OPENAI'S FUNDRAISING PLANS

Friar also told CNBC that OpenAI was raising fresh capital, pushing back against suggestions the ChatGPT maker had scaled back its fundraising ambitions amid the sharp AI stocks selloff.

The company is seeking fresh capital after its business grew 70 per cent quarter over quarter in the third quarter, with enterprise demand doubling over the same period, she said.

"It (the growth) is saying people are actually using AI and getting value from it," Friar said.

The fundraising comes as the market turmoil is raising questions about OpenAI rival Anthropic's widely awaited listing.

Reuters reported on Thursday that prospective investors in Anthropic's IPO are questioning whether the AI startup can begin its roadshow next week and stay on track for a November listing.

Investors are pushing ‌for a more attractive valuation to commit to the offering, with some viewing the recently discussed $1.5 trillion valuation as being at the high end of expectations, four people familiar with investor discussions told Reuters.