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’s fortunes to some of the world’s largest companies.
Altman largely shunned OpenAI’s bankers and lawyers to negotiate huge multiyear deals with Nvidia, Oracle, AMD and Broadcom to supply chips and other computing infrastructure.
Instead, he has leaned on a few lieutenants including the start-up’s 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.
The unconventional dealmaking process has resulted in agreements that analysts have criticised for their lack of detailed financial terms — as well as circular structures that tie together suppliers, investors and customers.
Wall Street has rewarded OpenAI’s counterparts with big share price bumps as each deal was announced, based on the promise of hundreds of billions of dollars in income.
But Altman’s team has been focused on the technical aspects of the chips deals “first and foremost” with the financial details “coming later”, said one person involved.
OpenAI 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.
Executives at the artificial intelligence 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.
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.
“Sam is the visionary, but Greg and the team under him really pulled [these deals] together,” said a person close to the company. “He’s quiet and behind the scenes but Greg is the one that’s pushing when it’s not so simple.”
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.
Friar, who joined OpenAI last year from social networking app Nextdoor where she was chief executive, was also “a very strong voice” on the deals, a second person said, and was tasked with ensuring the deals can ultimately be financed by the start-up.
A former Goldman Sachs equity research analyst, who held senior finance roles at Salesforce and payments group Block, Friar led Nextdoor’s 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.
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.
A small team under former Deloitte consultant Hoeschele was tasked with increasing the supply of computing power to Altman’s ambitious goal of 1 gigawatt a week. They have been responsible for the finer details of recent partnerships, the people said.
The deals OpenAI has negotiated stem from a model it first tested with AI cloud provider CoreWeave in March, according to insiders.
OpenAI signed a $11.9bn deal for CoreWeave’s 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’s shares have tripled in value.
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.
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.
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.
“Sam and Jensen have a long-standing relationship and talk constantly,” said a person close to the deal. “That one was very much them.”
A deal with AMD came together, after several years of talks about designing a new chip specifically for OpenAI’s use, when AMD chief executive Lisa Su “had another bite at it and said what are the terms we can do”, a person involved in the process said.
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.
Meanwhile, OpenAI’s $300bn five-year partnership with Oracle began when Oracle’s original customer for a data centre being built in Abilene, Texas, pulled out in mid-2024, said a person close to the process.
Clay Magouyrk, then head of Oracle Cloud Infrastructure, approached OpenAI, which swooped on the site, the person said.
Altman is also expanding his roster of advisers. He hired Mike Liberatore, formerly chief financial officer of Elon Musk’s 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.
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