WSJ What’s News - How Will OpenAI Fund Its Multibillion-Dollar Ambitions?

Episode Date: September 12, 2025

A.M. Edition for Sept. 12. OpenAI has big plans, spending billions of dollars on everything from computing, data centers, hardware and chips. But how will the world’s largest start-up pay for these ventures? WSJ’s Eliot Brown looks at OpenAI’s spending commitments and what it will take to fund them. Plus, Trump’s tariffs aren’t making the U.S. trillions yet - but as of early September, the U.S, has collected more than $159 billion in tariff revenue. And, the manhunt for Charlie Kirk’s killer enters its third day. Kate Bullivant hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, cultural enrichment, and all-inclusive fares. Discover more at viking.com. Utah's governor calls for public help to identify a suspect in the shooting of Charlie Kirk as the manhunt enters its third day. Plus, China warns Mexico against tariffs. that could harm Chinese goods.

And Open AI is on a spending spree, but can they fund it? It's basically just a really, really, really big bet that they're going to see revenue, the amount of money that customers pay, completely explode over the next few years. It's Friday, September 12th. I'm Kate Bullivant for the Wall Street Journal, and here is the AM edition of What's News,

the top headlines and business stories moving your world today. We begin in Utah where Governor Spencer Cox has urged people to help identify a person of interest in Wednesday's shooting of conservative political activist Charlie Kirk. Cox spoke as officials released a new video of the suspect's escape, showing the man running on the roof of a single-story building after the shooting and jumping off the ledge. Those have already been released, but we want to make sure that they get as much attention as possible so that we can get help from the public in tracking down this evil human being. Cox said the FBI had already received 7,000 tips about the shooting

after offering a reward of up to $100,000 for information. Vice President J.D. Vance traveled to Utah yesterday, meeting with Kirk's family and friends, and then accompanying Charlie Kirk's casket to Phoenix, where his political foundation Turning Point is headquartered. For further updates on Kirk's shooting and the ongoing manhunt, you can check out the live blog on WSJ.com throughout the day. Vice President J.D. Vance is expected in Utah later today, having yesterday met with Kirk's family and friends, and then accompanying Charlie Kirk's Casket to Phoenix, where his political foundation turning point is headquartered. For further updates on Kirk's shooting and the ongoing manhunt, check out the live blog on WSJ.com throughout the day.

China has threatened to retaliate against Mexico over a plan by the Mexican government to raise tariffs that would hurt Chinese automakers. In an official statement, a Chinese spokesperson said countries should work together to safeguard free trade at a time when the US has abused tariffs. It comes after Mexico announced this week, it plans to hike tariffs on imports of key goods from countries with which it doesn't have a trade agreement with,

including autos, steel and textiles as part of efforts to bolster domestic industry. Mexico has benefited from trade tensions between the US and China in recent years, with Chinese investments pouring in amid ballooning bilateral trade. Since Donald Trump returned to the White House and launched his global trade war, he's claimed the US has rate in trillions of dollars in revenue.

And while that's not yet true, the number is in the hundreds of billions. According to a budget model from the University of Pennsylvania's Wharton School, the US has collected more than $159 billion in tariff revenue as of early September. That's an almost 150% increase compared to a year ago, but the Wharton Schools Kent Smetters

says if you compare tariff revenues against the country's growing deficit, it still only makes up a small fraction. This is really the first time that tariffs are being used as a revenue generator for the U.S. Treasury. And the motivation behind that is that we're on this exploding debt path right now. It's unsustainable. And so there has to be some revenue that comes in or some spending that goes down in order to try to stabilize the future debt to output ratio in the U.S. economy. going forward, especially starting next year, if the current tariff rates stick around,

it will raise a fair amount of revenue. And, of course, ultimately that revenue is coming from U.S. households and U.S. firms who are essentially paying that money. Predicting future import demand and tariff revenue is also proving difficult, with many of Trump's tariffs still under negotiation, and the Supreme Court yet to weigh in on whether the president had the authority to impose the levy. Last month, a federal appeals court ruled he overstepped his authority when using his emergency powers to rewrite trade policy.

Brazil's Supreme Court has sentenced former President Jaya Bolsonaro to 27 years in prison after he was found guilty of plotting a coup to overturn the 2022 election. The move defies President Trump's efforts to derail a case that has electrified Latin America's largest country and thrust Brazil into the centre of the US administration's trade war. Trump levelled 50% tariffs on Brazilian exports because of what his administration has called a witch hunt against the former leader, while the Treasury Department has imposed sanctions

on a Brazilian Supreme Federal Court justice for his handling of legal cases involving Bolsonaro. Posting on social media, Secretary of State Marco Rubio, said the US will respond accordingly. without specifying how. Turning to markets now and shares of invidia supplier S.K. Heenix hit a record high this morning,

surging almost 7% after the South Korean company said it's ready to mass produce a new generation of high bandwidth memory chips. Journal editor, PR Venkut, says the achievement puts S.K. Hynekz in prime position to meet soaring demand from companies like Google, Amazon and Meta.

One of the biggest advantage for this is that, first, it's a next generation product with ultra-high performance for AI customers. So it is able to improve the performance by 69%. And when the product is applied, it says that the data bottlenecks significantly reduced and data center power costs are reduced, which is huge when we are looking at the amount of investments and demand that is there among companies like Google, Meta and S.K. Heinex now gets an edge compared to others. For example, we recently announced that Oracle has said it has signed several high-value contracts. So this puts Heinex in a little bit of a later position because they're already ready to produce M-Rs. Coming up, we look at OpenAI's billion-dollar spending spree to fuel its AI ambitions and not least whether it has the money

to fund those projects. That story after the break. This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking long ship with thoughtful service, destination-focused dining, and cultural enrichment on board and on shore. And every Viking voyage is all-inclusive with no children and no casinos. Discover more at Viking.com. OpenAI has big ambitions, recently committing to spending billions of dollars on everything from computing, data centres, hardware and chips.

The big question is how will the world's largest startup pay for these ventures? OpenAI has told investors it's on pace to make $13 billion in revenue this year. But according to a person familiar with the matter, the company loses billions of dollars a year. Journal reporter, Elliot Brown, has been digging into the numbers. Elliot, just remind us of OpenAI's spending ambitions and some of those planned projects. Yeah, so they've really racked up quite a lot of bills, that they are on track to spend $60 billion a year starting on a computing contract with Oracle to train their models. They've committed $18 billion to this giant venture with SoftBank Group to build data centers.

They've said they're going to make a mass market hardware device. And then there was just a deal that was revealed where they are planning to purchase 10 billion of customized chips. I mean, that's big spending. Open AI is currently on the hook to pay hundreds of billions of dollars over the next decade for these different ventures. How does it actually have that money? Well, the short answer is it doesn't. They take in somewhere around $13 billion or on pace to do that this year in revenue. but then their costs are far higher than that.

And so it's basically just a really, really, really big bet that they're going to see revenue completely explode over the next few years, that businesses and consumers are really just going to start shelling out and paying for more advanced AI products that we don't even have today. The bulkcase on OpenAI is that it is, you know, by far the fastest growing consumer app ever. They claim 700 million weekly active users, which is basically 9% of the entire globe. And the idea is that nothing has penetrated the world like this in technology before so quickly and that they are going to see revenue just skyrocket.

And if you look at how much their sales have grown, it's very fast. It's tripling year over year, which is not something you see often in tech. This sounds positive for Open AI. Why is there lingering uncertainty then? The short version is because they are committing much bigger numbers for spending than they are taking in money today. So it's really impressive that they've been able to grow to $13 billion in revenue, but they're rapidly agreeing to spend well over $60 billion a year in a few years.

And where do you get that money in the short term? They largely have been getting these huge equity infusions, you know, investment infusions from some really big tech investors. SoftBank is by far the biggest. They've committed $30 billion. And, you know, then there's a large number of other private equity players who are sort of heaving billions at Open AI. An issue, though, is that the private market for raising money like that is not infinite.

And Sam Altman has already tapped almost all of the biggest players in that. And it's sort of yet to be seen how a bunch deeper it is. And I guess on top of that, academics and industry experts doubting Open AI's belief that consumers will increase their spending on AI at explosive rates for years to come, right? Yeah, there's a number of recent academic reports that basically show that companies so far have not been seeing any sort of good return on their investments in AI. So lots of people are using chat GPT, but that doesn't mean it actually makes any money for companies. So consumers have been quick, business is a lot slower. And if that continues, that's a huge problem because Open AI and others are expecting more from sort of the business sector than they are from consumers. Journal Finance reporter Elliot, thanks for joining us.

Thanks for having me. News Corp, owner of the Wall Street Journal and Dow Jones NewsWires, has a content licensing partnership with OpenAI. And finally, a recent study has revealed men and women are using generative AI very differently. In fact, men are much more likely to use tools like chat GPT than women. Out of roughly 200 million average users of chat GPT, only 42% of them are female, and that number falls to 27% when you look at users accessing AI on their smartphone. Tech reporter Lisa Ward spoke to the study author who called the findings shocking. So you see a real drop when you compare men to women overall.

And they found the same trend in like really diverse groups. So whether that's college kids, whether that's business owners, whether that was in Australia or in the U.S. or in Canada, they looked at different groups across the globe and they were able to see this. And as Lisa explains, this gender gap could have consequences for the development of generative AI. Artificial intelligence learns from everybody and develops in a way that is gender neutral. If men are the primary users, gendered avi could exacerbate gender biases or stereotypes. For more on that study and how we use AI, check out our tech news briefing wherever you get your podcasts.

And that's it for What's News for this Friday morning. Today's show was produced by Daniel Bark. Our supervising producer is Sandra Kilhoff. And I'm Kate Bullivant for the Wall Street Journal. We'll be back tonight with a new show. Until then, have a great weekend, and thanks for listening. Thank you.