OpenAI will keep building data centers across the United States and keep raising money to pay for them, despite this week’s Democratic midterm sweep and the political backlash against the facilities. Chief financial officer Sarah Friar said on Friday that the election had not changed the company’s plans, arguing that demand for its products leaves it no choice but to keep adding computing capacity. The business grew 70 percent in the third quarter from the previous three months, she said, with enterprise demand doubling over the same period.
What Friar told CNBC
Friar spoke to CNBC’s Sara Eisen at the Citi TMT Leadership Summit in Pebble Beach, California. She said OpenAI would keep investing to meet customer demand and keep building relationships with host communities. “When I think about the midterms, I need to keep thinking about how do we keep investing to meet customer demand,” she said.
She was blunt about the politics. “We are paid as operators to manage scenarios,” she said. “I don’t think there was something that dramatically changed for us.” The election means more attention on data centers and the communities around them, not a reason to pause. OpenAI’s answer is to do more local work and build trust, she said.
The backlash she was answering
The reassurance landed three days after voters made data centers a central issue of the midterms. In 40 of 41 local ballot measures across 10 states, voters backed restrictions or rejected pro-development proposals. Texas governor-elect Gina Hinojosa made tighter scrutiny of the facilities a central campaign pledge, and Texas is one of the fastest-growing data-center regions in the world.
Markets felt the shift immediately. Fears that the Democratic sweep could slow construction of the facilities wiped about $2.5 trillion off the United States stock market on Thursday, as investors weighed the fallout for chip, cloud and networking companies. Yet there are already signs that the largest technology companies intend to keep building regardless.
Google said on Thursday it would invest $17 billion to build its first data center in Wyoming. Bloomberg reported separately that ByteDance is considering expanding a data-center project in northeastern Brazil. The two announcements, made the same week as Friar’s interview, suggest the industry’s largest spenders see the backlash as a cost to manage rather than a reason to stop.
The money behind the buildout
Friar also used the interview to push back on suggestions that OpenAI had scaled back its fundraising ambitions during the market selloff. The company is raising capital, she said, arguing that money would remain available to the strongest businesses. Its case rests on usage: 1.2 billion people use its products each week, with revenue split evenly between consumers and businesses.
The round itself has already shrunk once. Reports last week said OpenAI had cut its target to about $20 billion from $30 billion, with the valuation sought falling to $1.25 trillion. Friar did not give a new figure on Friday, but her message was that the round is proceeding and that growth, not market mood, will decide its size.
The fundraising comes as market turmoil raises questions about OpenAI’s closest rival. Investors in Anthropic are questioning whether that company can begin its roadshow next week and stay on track for a November listing, with some viewing its discussed $1.5 trillion valuation as too high. Anthropic has declined to comment.
Our read
Friar’s interview is best read as a message to two audiences at once. To communities and new governors, OpenAI is saying it has heard the complaints and will pay its own way. To investors, it is saying the demand is real, the money is still coming, and the midterm result changes the politics of the buildout without changing its economics.
The weak point in that message is the part Friar could not answer with a number. She gave no fundraising figure, no site list and no construction timetable, so the commitment to keep building is a statement of intent rather than a checkable plan. What she did provide, the growth figures, is the evidence investors will weigh against the selloff.
Why It Matters
OpenAI is the company whose spending sets the pace for the artificial intelligence industry, so a decision to keep building matters beyond its own sites. If the largest spender holds its course after an election fought partly over data centers, suppliers, lenders and rival builders will read it as a signal that the backlash raises costs without stopping the buildout.
Background
The interview followed OpenAI’s announcement on Thursday of a National Community Compact, under which future campuses it owns and operates will pay the full cost of their electricity, publish site-level water and power use, and stop asking public officials to sign non-disclosure agreements. Friar also said OpenAI still plans to look at a public listing in 2027.
Source: the Reuters report and CNBC interview coverage
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