OpenAI’s historic week has redefined the AI arms race

This week, OpenAI redefined what momentum — and risk — look like in the artificial intelligence arms race.

Now comes the hard part: Executing on CEO Sam Altman‘s multitrillion-dollar vision.

In a rapid-fire series of announcements, the company unveiled partnerships involving mind-bending sums of money and cemented its place at the center of the next wave of machine learning infrastructure.

It began Monday with news that Nvidia plans to invest up to $100 billion to help OpenAI build data center capacity with millions of graphics processing units, or GPUs. A day later, OpenAI revealed an expanded deal with Oracle and SoftBank, scaling its “Stargate” project to a $400 billion commitment across multiple phases and sites. Then on Thursday, OpenAI deepened its enterprise reach with a formal integration into Databricks — signaling a new phase in its push for commercial adoption.

“In all, this is the biggest tale yet of Silicon Valley’s signature ‘fake it ’til you make it,’ and so far it seems to be working,” said Gil Luria, managing director at D.A. Davidson.

The startup, known mostly for its ChatGPT chatbot and GPT family of large language models, is trying to become something much bigger: the next hyperscaler. Never mind that it’s burning billions of dollars in cash and is fully reliant on outside capital to grow, nor that its buildout plans require the amount of energy that would be needed to power more than 13 million U.S. homes.

Altman has long said that delivering the next era of AI will require exponentially more infrastructure.

“You should expect OpenAI to spend trillions of dollars on data center construction in the not very distant future,” he told CNBC and a small group of reporters over dinner in San Francisco last month. “And you should expect a bunch of economists wringing their hands, saying, ‘This is so crazy, it’s so reckless,’ and we’ll just be like, ‘You know what? Let us do our thing.'”

The story OpenAI is selling is that it’s responding to market demand, which shows no signs of stopping. And eventually, the thinking goes, this will all be profitable.

Current financial projections show OpenAI is on track to generate $125 billion in revenue by 2029, according to a source familiar with the company’s internal forecasts.

It’s a bold bet — and one full of execution risk.

Building out 17 gigawatts of capacity would require the equivalent of about 17 nuclear power plants, each of which takes at least a decade to build. The OpenAI team says talks are underway with hundreds of infrastructure providers across North America, but there are no firm answers yet.

The U.S. grid is already strained, gas turbines are sold out through 2028, nuclear is slow to deploy, and renewables are tied up in political roadblocks.

“I am extremely bullish about nuclear, advanced fission, fusion,” Altman said. “We should build more … a lot more of the current generation of fission plants, given the needs for dense, dense energy.”

What did crystallize this week, however, was the scale of Altman’s ambition, as the OpenAI CEO began to put hard numbers behind his vision — some of them staggering. 

“Unlike previous technological revolutions or previous versions of the internet, there’s so much infrastructure that’s required, and this is a small sample of it,” Altman said Tuesday at OpenAI’s first Stargate site in Abilene, Texas.

That mentality — blunt, ambitious, and dismissive of convention – has defined Altman’s leadership in this new phase.

Deedy Das, partner at Menlo Ventures, said the scale of OpenAI’s infrastructure partnerships with Oracle may seem extreme to some, but he views it differently.

“I don’t see this as crazy. I see it as existential for the race to superintelligence,” he said.

Das argued that data and compute, or computing power, are the two biggest levers for scaling AI, and praised Altman for recognizing early on just how steep the ramp in infrastructure would need to be.

“One of his gifts is reading the exponential and planning for it,” he added.

History shows that breakthroughs in AI aren’t driven by smarter algorithms, he added, but by access to massive computing power. That’s why companies such as OpenAI, Google and Anthropic are all chasing scale.

Alibaba, OpenAI and Anthropic have all pointed to insatiable demand for their models from consumers and businesses alike. As these companies push to embed AI into everyday workflows, the infrastructure stakes keep rising.

Ubiquitous, always-on intelligence requires more than just code — it takes power, land, chips, and years of planning.

“I think people who use ChatGPT every day have no idea that this is what it takes,”…