{"id":334071,"date":"2025-10-26T15:05:12","date_gmt":"2025-10-26T15:05:12","guid":{"rendered":"https:\/\/www.europesays.com\/us\/334071\/"},"modified":"2025-10-26T15:05:12","modified_gmt":"2025-10-26T15:05:12","slug":"openai-shunned-advisers-on-1-5tn-of-deals","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/334071\/","title":{"rendered":"OpenAI shunned advisers on $1.5tn of deals"},"content":{"rendered":"

OpenAI chief Sam Altman and an inner circle of executives masterminded deals worth as much as $1.5tn with little input from external advisers, despite unusual structures that tie the start-up\u2019s fortunes to some of the world\u2019s largest companies.<\/p>\n

Altman largely shunned OpenAI\u2019s bankers and lawyers to negotiate huge multiyear deals with Nvidia, Oracle, AMD and Broadcom to supply chips and other computing infrastructure. <\/p>\n

Instead, he has leaned on a few lieutenants including the start-up\u2019s president, Greg Brockman, chief financial officer Sarah Friar and Peter Hoeschele, recently promoted to a new role leading infrastructure financing, said people close to the company.<\/p>\n

The unconventional dealmaking process<\/a> has resulted in agreements that analysts have criticised for their lack of detailed financial terms \u2014 as well as circular structures<\/a> that tie together suppliers, investors and customers. <\/p>\n

Wall Street has rewarded OpenAI\u2019s counterparts with big share price bumps as each deal was announced, based on the promise of hundreds of billions of dollars in income.<\/p>\n

But Altman\u2019s team has been focused on the technical aspects of the chips deals \u201cfirst and foremost\u201d with the financial details \u201ccoming later\u201d, said one person involved.<\/p>\n

OpenAI<\/a> has structured its deals across multiple years, with payments linked to various milestones, giving it the option to scale back its chip orders in future if its needs to change or funding dries up.<\/p>\n

Executives at the artificial intelligence<\/a> start-up said their aim was to stimulate manufacturing and development of as many chips as possible, and that the financial specifics could be worked out later. <\/p>\n

People close to the process describe Altman pitching bold visions for these collaborations to Friar and Brockman, whose small teams then worked out the structuring and governance. <\/p>\n

\u201cSam is the visionary, but Greg and the team under him really pulled [these deals] together,\u201d said a person close to the company. \u201cHe\u2019s quiet and behind the scenes but Greg is the one that\u2019s pushing when it\u2019s not so simple.\u201d<\/p>\n

Brockman was part of the founding team at OpenAI in 2015. He was previously chief technology officer of fintech Stripe, dropping out of Massachusetts Institute of Technology to join the start-up.<\/p>\n

Friar, who joined OpenAI last year from social networking app Nextdoor where she was chief executive, was also \u201ca very strong voice\u201d on the deals, a second person said, and was tasked with ensuring the deals can ultimately be financed by the start-up.<\/p>\n

A former Goldman Sachs equity research analyst, who held senior finance roles at Salesforce and payments group Block, Friar led Nextdoor\u2019s initial public offering in 2021 through a special purpose acquisition vehicle (Spac), valuing the group at $4.3bn. However, its stock price has since fallen by as much as two-thirds.<\/p>\n

Altman has relied on former Citigroup banker Michael Klein as a financial adviser on fundraising agreements, but Klein did not work on the chip supply deals, said people close to the company.<\/p>\n

A small team under former Deloitte consultant Hoeschele was tasked with increasing the supply of computing power to Altman\u2019s ambitious goal of 1 gigawatt a week. They have been responsible for the finer details of recent partnerships, the people said. <\/p>\n

The deals OpenAI has negotiated stem from a model it first tested with AI cloud provider CoreWeave in March, according to insiders. <\/p>\n

OpenAI signed a $11.9bn deal for CoreWeave\u2019s computing power and in exchange was handed $350mn of CoreWeave shares. The contract has since expanded to more than $22bn, while the data centre operator\u2019s shares have tripled in value.<\/p>\n

In many cases, the subsequent deals started with chip companies approaching OpenAI about working together, the people said. The open-ended agreements have relied on trust between Altman and his counterparts. <\/p>\n

Altman has turned to direct employees rather than advisers in an effort to streamline dealmaking and make negotiations less adversarial, said a person with knowledge of the situation.<\/p>\n

Neither Nvidia nor OpenAI sought external advice on their transaction in which Nvidia agreed to invest up to $100bn in OpenAI in exchange for it spending as much as $350bn on 10GW of chips, according to people close to both companies.<\/p>\n

\u201cSam and Jensen have a long-standing relationship and talk constantly,\u201d said a person close to the deal. \u201cThat one was very much them.\u201d<\/p>\n

Recommended<\/p>\n

\"Sam<\/a><\/p>\n

A deal with AMD came together, after several years of talks about designing a new chip specifically for OpenAI\u2019s use, when AMD chief executive Lisa Su \u201chad another bite at it and said what are the terms we can do\u201d, a person involved in the process said.<\/p>\n

AMD granted the start-up warrants to purchase up to 10 per cent of the company for just 1 cent a share, in return for buying 6GW of chips. Law firm Sullivan & Cromwell advised OpenAI on the structure of the share purchases.<\/p>\n

Meanwhile, OpenAI\u2019s $300bn five-year partnership with Oracle began when Oracle\u2019s original customer for a data centre being built in Abilene, Texas, pulled out in mid-2024, said a person close to the process. <\/p>\n

Clay Magouyrk, then head of Oracle Cloud Infrastructure, approached OpenAI, which swooped on the site, the person said. <\/p>\n

Altman is also expanding his roster of advisers. He hired Mike Liberatore, formerly chief financial officer of Elon Musk\u2019s xAI, in September as business finance officer to lead financing for its push into AI infrastructure; he is expected to be crucial to future deals.<\/p>\n","protected":false},"excerpt":{"rendered":"OpenAI chief Sam Altman and an inner circle of executives masterminded deals worth as much as $1.5tn with…\n","protected":false},"author":3,"featured_media":334072,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[691,738,158,67,132,68],"class_list":{"0":"post-334071","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-technology","11":"tag-united-states","12":"tag-unitedstates","13":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115441089851486798","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/334071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=334071"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/334071\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/334072"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=334071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=334071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=334071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}