OpenAI CFO Sarah Friar said the company will continue investing in AI infrastructure to meet customer demand despite voter opposition to data centers in the midterms. She said she did not think the results had dramatically changed anything for the company and that demand for AI is real.
Friar said she needs to keep thinking about how the company can keep investing to meet customer demand, adding that it starts with having built relationships with hyperscalers and will continue to mean raising capital.
According to an analysis by Ballotpedia and additional results gathered by CNBC, voters in 10 states backed restrictions or rejected pro-development measures in all but one of 41 local ballot measures concerning data centers. Opposition to the facilities mounted quickly over the summer, with Americans worried about potential harm to the environment, higher utility bills and job losses.
Investors have turned skeptical on the AI trade amid higher borrowing costs, concerns about soaring debt and public backlash toward the industry. The Nasdaq suffered its steepest drop in 19 months on Thursday, led by a plunge in shares of chipmakers and neocloud companies most closely tied to the AI buildout, though stocks rebounded some on Friday.
Friar said that if the midterms mean more focus on data centers and communities, the company will keep working to get into those communities and build trust with them.
On Thursday, OpenAI published a policy blueprint and a series of commitments it pledged to apply to company-owned and operated data centers in the future.
Friar also discussed the company's financial plans. OpenAI confidentially filed its prospectus with the Securities and Exchange Commission in June, and Friar said the company would continue to look into a 2027 debut. Friar said OpenAI is in talks to raise funding at a $1.25 billion pre-money valuation, adding that a good CFO always raises money when she can and that the round is ongoing.
Anthropic, OpenAI's chief rival, aims to go public first, targeting a Nasdaq listing in mid-November. Anthropic's prospectus shows revenue in the first nine months of the year jumped roughly 1,200% to $33.2 billion, and the company said it has entered into purchase commitments and lease agreements with an aggregate committed spend of about $895.4 billion, substantially all related to compute and infrastructure.
Analysis
Why This Matters
- The public backlash against data centers could slow the buildout of AI infrastructure, affecting the pace of AI development and deployment.
- Voter concerns about environmental impact, utility costs and job losses may force AI companies like OpenAI to invest more in community relations and policy commitments.
- Investor skepticism reflects broader uncertainty about the financial sustainability of massive AI infrastructure spending.
Background
AI companies depend on data centers to train and serve models, leading to a rapid buildout that has drawn scrutiny from local communities. In the recent midterm elections, voters in multiple states expressed opposition to new data centers, citing environmental harms, rising utility bills and potential job displacement. Meanwhile, the broader AI trade has faced headwinds from higher borrowing costs and debt concerns.
Key Perspectives
Voters: Backed restrictions or rejected pro-development data center measures in all but one of 41 local ballot measures across 10 states.
Investors: Have turned skeptical on the AI trade due to higher borrowing costs, concerns about soaring debt and public backlash toward the industry.
OpenAI CFO Sarah Friar: Says the company will continue investing in data centers and building trust with communities, and that election results do not dramatically change its plans.
What to Watch
- OpenAI's progress toward a potential 2027 IPO, including the outcome of its ongoing funding round at a $1.25 billion pre-money valuation.
- Anthropic's attempt to go public first, targeting a Nasdaq listing in mid-November, and how its prospectus disclosures affect investor sentiment.
- Further local ballot measures or regulatory actions related to data center development in the wake of the midterm results.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedOpenAI will keep investing in AI data centers despite the election results, CFO Sarah Friar says.US Top News and Analysis: “OpenAI CFO Sarah Friar on Friday said the company will continue to invest in artificial intelligence infrastructure, even after voters strongly opposed data centers during Tuesday's midterm elections.”
- SupportedVoters backed restrictions or rejected pro-development measures in all but one of 41 local ballot measures across 10 states.US Top News and Analysis: “Out of 41 local ballot measures across 10 states, voters backed restrictions or rejected pro-development measures in all but one, according to an analysis by Ballotpedia and additional results gathered by CNBC on Wednesday.”
- SupportedFriar said OpenAI will continue investing to meet customer demand despite voter opposition to data centers.US Top News and Analysis: ““When I think about the midterms, I need to keep thinking about how do we keep investing to meet that customer demand,” Friar told CNBC's Sara Eisen”
- SupportedFriar said she did not think the election results had dramatically changed anything for OpenAI.US Top News and Analysis: “Friar said she doesn't think the election results dramatically changed anything for the company.”
- SupportedFriar said demand for AI is real.US Top News and Analysis: ““The demand for AI is real,” Friar said.”
- SupportedFriar said OpenAI would keep working to enter communities and build trust if the midterms meant more focus on data centers and communities.US Top News and Analysis: ““If the midterm means more focus on data centers and communities, we're going to keep doing the work to get into those communities and to build trust with them,” Friar said.”
- SupportedFriar said investing would involve relationships with hyperscalers and raising capital.US Top News and Analysis: ““It starts early with having built relationships with all of the hyperscalers, and it will continue to mean that we raise capital.””
- SupportedFriar said OpenAI is in talks to raise funding at a $1.25 billion pre-money valuation.US Top News and Analysis: “OpenAI is in talks to raise funding at a $1.25 billion pre-money valuation, Friar said Friday.”
- SupportedFriar said OpenAI would continue to look into a 2027 debut.US Top News and Analysis: “Friar said Friday that the company would continue to look into a 2027 debut.”
- SupportedAnthropic aims to go public before OpenAI, targeting a Nasdaq listing in mid-November.US Top News and Analysis: “Anthropic, OpenAI's chief rival, is trying to go public first, with an aim to hit the Nasdaq in mid-November.”
- SupportedAnthropic's revenue in the first nine months of the year rose roughly 1,200% to $33.2 billion.US Top News and Analysis: “Anthropic's revenue in the first nine months of the year jumped roughly 1,200% to $33.2 billion, according to its prospectus.”
- SupportedAnthropic said its aggregate committed spend under purchase commitments and lease agreements was about $895.4 billion, substantially all related to compute and infrastructure.US Top News and Analysis: “The company said it has entered into purchase commitments and lease agreements with an aggregate committed spend of about $895.4 billion, “substantially all of which is related to compute and infrastructure.””
