📶 trillion dollar bet

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Good morning 👋

If you think you have big plans, we know somebody who is thinking bigger.

Sam Altman and OpenAI are looking for trillions (not a typo) to develop more chips. It’s a massive deal even by OpenAI’s standards, and this time, the company will need support from sovereign wealth funds and governments.

We break it down and give our two cents in this week’s piece.

TL;DR:

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NEWS
“You know what’s actually cool?”

OpenAI is at it again.

Sam Altman is reportedly on the hunt for a staggering amount of investment - we're talking in the trillions - aimed at reshaping the AI and semiconductor industries.

The amount is staggering (estimated to be anywhere between $5-$7 trillion), and we’re just starting to wrap our heads around second-order effects.

Why it matters: 

As you can imagine, powering something like ChatGPT costs a fortune. Hosting and training LLMs has a price, and the biggest bottleneck for OpenAI’s growth has been the hardware powering ChatGPT.

So that’s what they’re solving for ... with trillions of dollars in funding.

This will enhance the underlying product, improve computational power, and it gives the company seemingly infinite runway, but we’re more concerned with another question.

Where’s the money coming from?

Our guess is a mix of sovereign wealth funds, corporates, and possibly even government grants, and the UAE and SoftBank are the two most notable names allegedly involved in the deal.

What happens next: 

It’s becoming pretty clear that OpenAI has become the most important company in the world. Not to get dramatic, but its direction will largely impact the future of the workforce (both white and blue-collar).

We’re skeptical that this deal gets done ($7 trillion is more than the market cap of AAPL + MSFT combined), but whenever there is news like this, we listen.

If it does get done, it will be the first round of funding that requires government funding. There are only a small handful of governments that have enough assets to be able to buy in on this type of hand, and the question we’re asking ourselves is “Why?”.

Is it purely for financial returns? Are they buying power in the form of control over the supply chain? Or are they buying something else?

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LINKS

📧 The power of investor updates: Something most startups miss (from one of my new favorite newsletters)

🧮 Decision-making frameworks: How to make better decisions

🧠 Extreme brainstorming questions: Prompts to think outside of the box for running your business

🎁 Benedict Evans AI presentation: His annual slides on AI and the opportunity if presents

🐎 We Don’t Sell Saddles Here: Stewart Butterfield’s best internal memo in the early days of building Slack

🤖 The Artificial Intelligence Revolution (Part 1): What But Why goes deep

❌ Most People Won’t: Do things different, get different results

📶 21 Lessons from Erik Serrano: A masterclass on who to invest into investment managers

✅ Recruiting checklist: Make sure you have all your ducks in a row before you make your next hire

TWEET

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JOBS

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MEMES

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Thanks for reading this far and giving us a little bit of your attention this week.

Feel free to unsubscribe whenever this stops becoming valuable to you.

- Clay

P.S. Here are the results from our poll question in last week’s piece:

What state is the best for a venture-backed company to incorporate?

🟨🟨⬜️⬜️⬜️⬜️ Delaware (14)

🟨🟨🟨⬜️⬜️⬜️ Wyoming (17)

🟩🟩🟩🟩🟩🟩 Nevada (33)

🟨🟨🟨⬜️⬜️⬜️ Somewhere else (15)