An internal rift at OpenAI pits CEO Sam Altman’s aggressive IPO ambitions against CFO Sarah Friar’s financial caution, exposing the strain of the firm's more than $600 billion in spending commitments.
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OpenAI's $600 billion spending plan sparks internal clash over IPO
A disagreement between Chief Executive Officer Sam Altman and Chief Financial Officer Sarah Friar over the timing of a public offering reveals the internal tensions at OpenAI, as the company confronts staggering financial commitments and rising competition. Altman privately hopes for an IPO as early as the fourth quarter, while Friar has argued the company is not ready, citing concerns over a spending plan that now exceeds $600 billion.
The scale of the spending is a primary source of internal friction and a key risk as rival Anthropic, which is also eyeing a Q4 IPO, erodes OpenAI's market share. "If I misjudge, even by a year... you go bankrupt," Anthropic CEO Dario Amodei said in a February podcast, alluding to the dangers of over-investing in data centers. "My impression is that some companies have not done the math on this."
These commitments, which include deals with Oracle for approximately $300 billion and Microsoft for $250 billion, are designed to secure the massive computing power needed for future AI models. The company has warned investors its cash burn through 2030 could surpass $200 billion, more than double its previous forecasts, raising doubts about whether slowing revenue growth can support such a plan.
The conflict highlights the difficult position of the CFO in a founder-led firm with massive ambitions. "She's facing a founder who has a big vision and wants to spend, spend, spend," one person who has worked closely with both Altman and Friar said. "It's a tough job."
IPO Timeline Clash
While Friar has voiced reservations, OpenAI has already engaged law firms Cooley and Wachtell, Lipton, Rosen & Katz, and held informal talks with IPO underwriters at Goldman Sachs and Morgan Stanley. Altman's desire to go public is reportedly motivated in part by a desire to beat rival Anthropic to the market in what could be one of the largest IPOs in history.
Friar’s cautious stance is not new. In a November interview with The Wall Street Journal, she stated an IPO was "not on the table" as the company was still focused on "right-sizing the company for where we are now."
A $600 Billion Gamble on Compute
OpenAI's financial obligations for server capacity are unprecedented in the tech industry. The company has signed contracts totaling roughly $665 billion, spread across providers including:
- Oracle: approximately $300 billion over five years, starting in 2027
- Microsoft: $250 billion through 2032
- Amazon Web Services: approximately $138 billion over eight years
- CoreWeave: $22 billion over five years
- Cerebras: $10 billion
Friar has previously explained the necessity of these long-term commitments, noting the multi-year lead time for data center construction. "I have to make a decision today for 2028, 2029, 2030," she said. "If I don't place that order today, that data center will not show up."
Internal Power Structure Shifts
The strategic disagreement is mirrored by changes in the company's internal reporting structure. In an unusual move for a large corporation, Friar has been reporting to Chief of Applied Business Fidji Simo since last August, not directly to CEO Sam Altman.
Multiple sources close to the company told The Information that Altman has excluded Friar from several critical financial planning discussions. In one instance, Friar was not invited to a meeting with a major OpenAI investor to discuss server spending, a topic on which she had previously been a key participant. Her absence was described as "conspicuous and awkward" by an attendee.
This article is for informational purposes only and does not constitute investment advice.
