According to a report in the Wall Street Journal, OpenAI CEO Sam Altman plans to build a venture company focused on manufacturing the chips needed to realize his vision of an AI revolution, particularly in the Middle East. The group is said to be working hard to raise funds by lobbying governments around the world.
And to call this vision “capital intensive” is an understatement.
Altman believes the project will require raising up to $7 trillion, the magazine reported.
According to data from S&P Global Market Intelligence and Pitchbook (via the Financial Times), there was just under $3 trillion of “dry powder” (funds committed but not yet deployed) available across the universe at the end of last year. was. of private equity and venture capital funds.
Of course, discussions with Mr. Altman and oil-rich governments seeking new ways to invest these winnings will help entrepreneurs realize these lofty ambitions. It is a clear recognition that we need to think bigger than the two sources of institutional capital that we currently have. Expand your range of alternative assets.
And this dry powder napkin calculation (roughly $2.6 trillion for PE and closer to $300 billion for VC) is also due to the rise of private credit, the balance sheet-funded investments that some companies can consider, and the global It does not take into account all the other types of arrangements available to traditional power brokers. To get your money where you need it. Tax efficiently, of course.
But nearly a year and a half after the AI boom that captivated investors and the corporate world began, industry leaders are debating what it will take for the technology to reach its full potential. The market value of our first AI is growing in grandeur. Round winners include Nvidia (NVDA), Microsoft (MSFT), and AMD (AMD).
Old-school stock market investors may take comfort in Josh Schaefer’s report that concentration in a few stocks won’t spell doom for the entire market. After all, there are hundreds of other companies and industries (493 to be exact) that could take back some slack from these leaders as the economic cycle winds down.
But outside the relatively stable world of mega-cap stocks, ambitions tied to the rise of AI still see the upper limit of potential as artificial.