OpenAI CEO Sam Altman has explored acquiring or partnering to establish a rocket company to compete directly with Musk's SpaceX.
On Thursday, according to sources cited by The Wall Street Journal, Altman had contact with at least one rocket manufacturer, Stoke Space, during the summer to discuss accelerating progress in the fall. The proposal includes OpenAI making a series of equity investments in the company and ultimately gaining control, with a total investment of billions of dollars. However, people close to OpenAI have stated that the relevant negotiations are no longer active.
For a long time, Altman has shown interest in the possibility of building data centers in space, believing that the enormous demand for computing resources from artificial intelligence systems may ultimately require such a huge amount of electricity that space becomes a better choice. This move will further escalate his competition with Musk in the fields of rocket launches and AI.
This move comes at a time when OpenAI is facing market headwinds. The company has signed billions of dollars in computing transactions, but has not publicly stated how it will foot the bill for these projects, while ChatGPT is losing market share.
Details of negotiations between rocket companies have surfaced
According to The Wall Street Journal, Altman had contact with Stoke Space last summer. The company was founded by former employees of Jeff Bezos' Blue Origin and is developing fully reusable rockets, which is also a goal that SpaceX is striving to achieve.
One of the negotiation options is for OpenAI to make a series of equity investments in Stoke, ultimately obtaining controlling stakes. This investment will total billions of dollars over time. Insiders say that discussions have heated up in the autumn, but people close to OpenAI say that the relevant negotiations are no longer active.
The deal with Stoke will give Altman the right to participate in the rocket Nova that the company is currently developing. But creating a new rocket is full of technical challenges and regulatory issues, usually taking ten years, which makes it difficult to start a new company from scratch. Currently, multiple launch companies including Blue Origin, Rocket Lab, and Stoke are attempting to challenge SpaceX's position.
The grand vision of a space data center
Altman has publicly discussed the possibility of establishing a rocket company and developing data centers in space multiple times. He believes that the demand for computing resources required to power artificial intelligence systems is enormous, and ultimately may require so much electricity that environmental impacts will make space a better choice. Supporters of the orbital data center say that this will enable companies to use solar energy to power them.
I do speculate that over time, many parts of the world will be filled with data centers, "Altman recently said in a podcast with Theo Von. Perhaps we will build a huge Dyson sphere around the solar system and say, 'Hey, putting these things on Earth actually doesn't make sense.'
This concept has not been confirmed yet, but Alphabet's Google and satellite operator Planet Labs have reached an agreement to launch two prototype satellites carrying Google AI chips in 2027. Tech CEOs including Bezos, Musk, and Google's Sundar Pichai have praised the possibility of building AI computing clusters in space.
OpenAI faces payment pressure
When these discussions about potential rocket investments began to take shape, the market's enthusiasm for AI was at its peak. Altman announced a series of chip and data center transactions in September and October last year, with partners including Oracle, Nvidia, Advanced Micro Devices, and others.
Investors initially responded positively to these announcements, and Oracle and Nvidia stock prices quickly rose in the weeks following the announcements. But the market subsequently turned pessimistic about expansionist AI ambitions, with Oracle's stock price falling about 19% and Nvidia's falling about 13% in the past month. Nvidia's Chief Financial Officer stated this week that the $100 billion deal between the company and OpenAI has not yet been finalized.
OpenAI has signed nearly $600 billion in new computing commitments in just the past few months, raising questions about how it pays for these development projects. This startup is expected to achieve $13 billion in revenue this year, while also facing pressure from Anthropic, whose sales among programmers and enterprise clients are rapidly growing.
On Monday, OpenAI announced its entry into the; Red Alert "; The status is improving ChatGPT, which had previously lost market share to Google's Gemini chatbot. Therefore, OpenAI is delaying the launch of other products, including advertising, and encouraging employees to temporarily switch jobs to focus on chatbots.
Engage in 'comprehensive competition' with Musk
The proposed collaboration with Stoke will make Altman's competition with Musk more direct. SpaceX dominates the field of rocket launches, while Musk also operates rival AI startup xAI. Altman recently founded Merge Labs, a brain computer interface startup that competes with Musk's Neuralink, and OpenAI is also building a social network that may compete with X.
Altman is a seasoned venture capitalist who has managed the startup incubator Y Combinator, which has invested in Stoke. According to a previous report by The Wall Street Journal, he oversees an opaque and massive investment portfolio involving over 400 companies. He doesn't invest as frequently as before, but he's not shy about using OpenAI's balance sheet to fund ambitious projects. For example, earlier this year, he promised OpenAI and SoftBank to invest $18 billion in a new data center company called Stargate.
Should I establish a rocket company? I hope that the energy ultimately consumed by humanity will far exceed the energy we may produce on Earth, "Altman asked in a podcast with his brothers last June
