OpenAI Seeks $1T in US Loan Guarantees as Burry and Banks Bet Against the AI Boom

OpenAI has reportedly sought US government loan guarantees to support what could be one of the largest private infrastructure projects in history, an AI expansion costing more than $1 trillion.

The plan also fits with OpenAI's broader efforts to reduce its dependence on Nvidia's expensive GPU ecosystem. alternative financing and chip procurement strategies to support its trillion-dollar expansion into large-scale artificial intelligence infrastructure.

The timing is remarkable. As OpenAI seeks federal support, some segments of Wall Street are becoming increasingly cautious about the sustainability of the AI ​​rally. Hedge fund manager Michael Burry is reported to have taken significant put options positions. against Nvidia and Palantir, betting on a correction in overextended AI stocks.

Meanwhile, banks such as Deutsche Bank are exploring the possibility of hedging data center risks in anticipation of a possible cooling-off period in AI infrastructure spending.

This marks a clear divergence between Silicon Valley's aggressive capital expansion and Wall Street's tightening risk appetite—a contrast that could shape the next phase of the AI ​​investment cycle.

OpenAI Federal Presentation: Building AGI with Government Dollars

Since its launch, OpenAI has attracted significant private and corporate investment through its close partnership with Microsoft. This support has fueled the company's rapid expansion into both research and cloud-based AI services.

However, the company's ambitions now extend beyond traditional venture and corporate funding. OpenAI is seeking federal loan guarantees, effectively positioning its AI infrastructure strategy as a public-private partnership.

The move will shift some of the financial burden and risk of scaling artificial intelligence from private investors to the U.S. government, marking a significant evolution in how cutting-edge technology projects are funded.

At a recent conference, CFO Sarah Friar said the company is building “an ecosystem of banks, private equity and perhaps even government” participants.

How will the loan guarantee work?

In a typical scenario, tech companies raise debt through private markets, paying interest rates that reflect their credit risk. OpenAI's proposal departs from this model.

By seeking a federal loan guarantee, the company would transfer most of the risk of default from lenders to the U.S. government. This support will allow OpenAI to borrow at significantly lower rates and negotiate higher loan-to-value terms, lowering the overall cost of capital for its ambitious infrastructure plans.

According to OpenAI CFO Sarah Friar, government involvement could “significantly reduce the cost of financing”, while simultaneously expanding the base of lenders willing to finance the project.

Strategic bets

For policymakers and taxpayers, the situation is complex. A private technology firm seeking government funding to build infrastructure that could accelerate automation (and potentially displace jobs) poses a political and ethical dilemma.

Analysts compared OpenAI's proposal to historical frameworks such as the Defense Production Act and Department of Energy loan programs that supported early electric vehicle and solar energy industries.

The difference this time is in the asset class: artificial intelligence infrastructure rather than physical production. If the plan goes ahead, the financial risk will be borne by the public rather than the venture capital community that traditionally funds cutting-edge technologies.

By tying artificial intelligence development to federal support, OpenAI effectively redefines the boundary between public and private investment in computing infrastructure, hinting at a hybrid state-Silicon Valley model for the next era of technological development.

Market Skepticism: The Artificial Intelligence Bubble Story Returns

Based on recent reports and market movements, the relentless growth of AI is starting to show visible signs of slowing down.

Two very different players are showing varying degrees of skepticism about the prospects of the AI ​​boom: one is a celebrity contrarian investor, and the other is a multinational bank with significant exposure to the hardware boom.

Burry's big short position in artificial intelligence

According to Scion Asset Management Q3 2025 Report 13FHedge fund manager Michael Burry took significant positions in put options on Nvidia (NVDA) and Palantir (PLTR) with a total notional value of approximately $1.1 billion.

These bearish bets represent approximately 80% of Scion's disclosed U.S. stock portfolio, indicating a strong belief that AI's current growth may have moved beyond its fundamentals.

Burry's stance suggests he expects a significant correction in valuations for both artificial intelligence hardware and software, a contrasting view amid the sector's explosive growth. It's worth noting, however, that 13F filings do not include cash or foreign assets, meaning Scion may have significant reserves beyond its reported U.S. stock positions.

However, Berry's track record requires caution in interpretation. His legendary short position in the US housing market in 2008 was very profitable, but it was long-term and capital-intensive, requiring significant collateral to maintain open positions.

As recently as 2023, Burry expressed a pessimistic view of social media platform X shortly before a significant market recovery, after which he quietly deleted the call.

Conclusion? There is certainly a risk that the AI ​​bubble may burst. However, timing it right is risky; the market may well rise much higher before a significant decline.

Deutsche Bank and the risk of overexposure

On the other hand, Deutsche Bank quietly rebalancing your exposure. The bank is reportedly exploring hedging and short baskets of artificial intelligence stocks and data center debt as it evaluates its exposure to multibillion-dollar computing infrastructure financing.

As lenders themselves begin to hedge their bets, the frenzy that until recently dominated AI investing may begin to morph into something more measured and cautious.

The Big Debate: Public Risk to Private AI

OpenAI's request for government-backed loan guarantees raises questions that go far beyond corporate finance.

If Washington agrees to support even part of a $1 trillion artificial intelligence infrastructure plan, it will mark a defining shift for the industry, the moment when advanced computing moves from a private enterprise to a government-subsidized utility.

Economists warn that data centers and GPUs depreciate in value much faster than traditional infrastructure, creating a mismatch between the short lifespan of these assets and the long-term liabilities they may require from taxpayers.

Proponents counter that such a partnership could represent a form of digital-age industrial policy, ensuring U.S. leadership in artificial intelligence and artificial general intelligence ahead of global competitors, especially China and developing countries. state-backed players in the Middle Eastcan scale comparable systems.

The move reflects not only the scale of the infrastructure, but also a shift in the way AI is implemented: from strictly enterprise systems to increasingly personalized, user-centric models that are tailored to everyday interactions and include modular personalities and adult customization.

Critics, however, see a familiar pattern emerging: socialized risk and privatized reward.

Either way, the proposal poses a deeper question for the coming decade: Can the AI ​​revolution be sustained by private capital alone, or has it become too big to fail?