openai asked trump administration to expand chips act tax credit to cover data centers

OpenAI Seeks Government Support for Data Center Expansion

A recently disclosed communication from OpenAI provides further insight into the company’s strategies for securing governmental assistance with its extensive data center development initiatives.

Request for Expanded Tax Credit

The letter, authored by OpenAI’s chief global affairs officer, Chris Lehane, and directed to Michael Kratsios, the White House’s director of science and technology policy, proposes an expansion of the Advanced Manufacturing Investment Credit (AMIC).

Currently, the AMIC, a 35% tax credit established within the Biden administration’s Chips Act, focuses on semiconductor fabrication. OpenAI suggests extending its coverage to encompass electrical grid components, AI servers, and AI data centers.

Benefits of AMIC Expansion

According to Lehane, broadening the scope of the AMIC would effectively reduce the cost of capital. This would also mitigate early investment risks and stimulate private capital investment.

The intended outcome is to alleviate supply chain bottlenecks and expedite the development of AI infrastructure within the United States.

Additional Government Assistance Sought

OpenAI’s request extends beyond the tax credit. The company also advocates for a streamlined permitting and environmental review process for its projects.

Furthermore, they propose the creation of a strategic reserve of essential raw materials. This reserve would include resources like copper, aluminum, and refined rare earth minerals – all crucial for constructing AI infrastructure.

Clarification on Infrastructure Loan Backing

The letter gained increased attention following comments made by OpenAI executives. CFO Sarah Friar initially suggested the government should “backstop” OpenAI’s infrastructure loans.

However, she later clarified her statement on LinkedIn, stating that OpenAI is not actively seeking a government guarantee for its infrastructure investments. She acknowledged that her use of the term “backstop” had caused confusion.

CEO Altman's Position

CEO Sam Altman also addressed the matter, affirming that OpenAI does not desire government guarantees for its data centers.

He emphasized the importance of a free market, stating that governments should avoid favoring specific companies and that taxpayers should not be responsible for bailing out businesses that make poor decisions.

Altman did mention that loan guarantees were discussed in the context of supporting the expansion of semiconductor fabrication facilities in the US.

Projected Revenue and Investment

In a recent post, Altman projected that OpenAI anticipates exceeding $20 billion in annualized revenue by the end of 2025.

He further forecasts growth to hundreds of billions of dollars by 2030, supported by $1.4 trillion in capital commitments over the next eight years.

• The AMIC is a key component of OpenAI’s strategy.
• Streamlined permitting is vital for rapid deployment.
• Securing raw materials is essential for long-term growth.