AI Data as Debt - New Global Currency
USD 4B - Major Banks + Open AI Debt-for-Data Deal (Participating)
The candlesticks are burning, AI/data to re-invigorate credit and investment markets?
I’ve speculated for a while that Data will become a new currency; a new asset-class.
It seems inescapable, as commercial real estate portfolios tilter, and scaled interest and debt come due, as insurance (most notably in bellwether California, now spreading) markets falter, and as banking itself yet struggles — that asset managers like alternative investor global hedge funds — would look to commodify a new valuable asset class — DATA - and specifically that of the most data-heavy industry, Artificial Intelligence.
Usually, before it is an asset class, a product/good/facility/service gets accepted by large banking institutions as available for collateral purposes (which allows a market to develop as investors can then see its efficacy and provide benchmarking).
Today Open AI announced it had secured a USD 4B (with a B) credit facility with major banks in a syndicate, for new debt capitalization; backed by its company and assets. (»»>yes, and the other 6B equity it announced it raised)
Who invested? Here are some :
Thrive Capital: Led the round, investing about $1.3 billion. (Joshua Kushner)
Microsoft: OpenAI's biggest corporate backer, participated in this round.
Nvidia: New participation from the chip manufacturer.
SoftBank: The Japanese tech giant joined the round.
MGX: Abu Dhabi's state-backed investment firm participated.
Altimeter Capital: Mentioned as a participant. (Brad Gerstner, attorney also)
Fidelity: Also listed as an investor.
Khosla Ventures: A returning venture capital investor.
[By the way, 4B would purchase GPT-4 tokens: 100,000,000,000,000 (100 trillion tokens).]
Even with this, its debt-to-income is e
Here the relevant details :
OpenAI has recently secured significant funding and credit facilities from major banks and investors. Here are the key details:
Credit Facility:
OpenAI has obtained a $4 billion revolving credit facility from several global banks
The participating banks include JPMorgan Chase, Citi, Goldman Sachs, Morgan Stanley, Santander, Wells Fargo, SMBC, UBS, and HSBC
This credit line is currently undrawn and provides OpenAI with additional financial flexibility
Recent Funding Round:
OpenAI completed a $6.6 billion funding round
This funding round valued the company at approximately $157 billion
Investors included Microsoft, Thrive Capital, SoftBank, Nvidia, and others
Total Available Liquidity:
With the new credit facility and recent funding, OpenAI now has access to over $10 billion in liquidity
Financial Outlook:
OpenAI is projected to generate $3.6 billion in revenue this year
However, the company is expected to incur losses exceeding $5 billion
What may be even more interesting than 4B even, is that several of these banks also announced operational partnerships with OAI and specific integrations of OAI tools into their internal and external operations. To wit:
Morgan Stanley is using a GPT-4 based AI assistant named Debrief a “robot broker assistant”.
OpenAI-powered tool designed to assist Morgan Stanley's financial advisors.
Sits in on client meetings (with consent) and generates notes, summarizes key points, and surfaces action items.
Post-meetings, creates draft emails for advisors to edit and send, and saves notes into Salesforce.
Being rolled out to Morgan Stanley's approximately 15,000-16,000 financial advisors.
Estimated to save about 30 minutes per meeting for advisors.
Allows advisors to focus more on client engagement and decision-making during meetings.
Improves note-taking quality compared to human note-takers.
Requires client consent for recording and use during meetings.
JPMorgan leveraging OpenAI's models for various not-publicly-disclosed tasks.
Goldman Sachs leveraging OpenAI's models for various not-publicly-disclosed tasks.
BBVA, a European bank, has signed an agreement with OpenAI to deploy ChatGPT Enterprise among its employees.
This is a watershed moment for AI and Data as a currency and mode of collateral/investment with the influx of funding, credit, and direct collaboration in the banking and investment sectors.
It’s also a huge consolidation of the AI market by OAI which will homogenize lot’s of AI usage worldwide and we will never know.
It will by necessity, as I have mentioned before, touch on consideration, advisement, and completion of LEGAL tasks, eroding further the historic mandate of banking and investment law firms and attorneys. Banks and investment will now be (automated) lawyers too!
