# Compute shortages reach beyond chips and power

Markdown copy of https://realalpha.app/s/compute-shortages-reach-beyond-chips-and-power/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Sarah Friar](https://realalpha.app/builders/sarah-friar/) · Sarah Friar is CFO of OpenAI. · Leads OpenAI's finance as CFO; previously oversaw Square's 2015 IPO and helped take Nextdoor public as CEO.
- Host: [Chamath Palihapitiya](https://realalpha.app/people/chamath-palihapitiya/) · Founder & CEO, Social Capital · Led Facebook's growth team; his firm backed Slack and AI chipmaker Groq.
- Host: [Jason Calacanis](https://realalpha.app/people/jason-calacanis/) · Founder & CEO, LAUNCH · Early Uber angel; sold Weblogs Inc. to AOL; hosts This Week in Startups.
- Host: [David Sacks](https://realalpha.app/people/david-sacks/) · Co-founder & partner, Craft Ventures · PayPal's first COO, founded Yammer; White House AI & crypto czar 2025–26.
- Host: [David Friedberg](https://realalpha.app/people/david-friedberg/) · CEO, Ohalo · Founded The Climate Corporation, sold to Monsanto for about $1.1B in 2013.
- Show: All-In
- Episode: [OpenAI CFO Sarah Friar: IPO, AI Rivalries, New Device, and Spending $100B+ on Compute](https://realalpha.app/v/TjrShuj_Zsg/), Jun 2, 2026
- Moment: 8:27 to 14:37 of the episode (6 min), playing on https://realalpha.app/s/compute-shortages-reach-beyond-chips-and-power/; the episode from there: https://realalpha.app/v/TjrShuj_Zsg/?t=507

## Quote

> “we're not going to raise your electricity bills. We're going to pay for our infrastructure and our power. It will not be the **rate payer that has to pay**.”
> — [Sarah Friar](https://realalpha.app/builders/sarah-friar/) at [10:25](https://realalpha.app/v/TjrShuj_Zsg/?t=625) · All-In

## Takeaways

1. Supply constraints span power, land, chips, memory, talent, and trust.
2. The Michigan site promises no higher power bills and 2,500 union jobs.
3. Multimodal AI will require more real-time compute.

## About this segment

Sarah Friar says compute is scarce through at least 2027, with bottlenecks from energy and memory to talent and community trust. She details how OpenAI is addressing local concerns around a new data center.

From “OpenAI CFO Sarah Friar: IPO, AI Rivalries, New Device, and Spending $100B+ on Compute”, Jun 2, 2026. [Watch the full episode](https://realalpha.app/v/TjrShuj_Zsg/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[8:29](https://realalpha.app/v/TjrShuj_Zsg/?t=509) So first of all, yes, compute is a very scarce resource at the moment. I mean, what we see in our business, we're going up that kind of vertical wall of demand right now, and there's just not enough tokens available. So I'm very grateful that I got to work alongside Greg and Sam. I think we're very prescient on this. And last year, we were definitely taking some, you know, arrows in the back about why are they out there buying all this compute?

[8:54](https://realalpha.app/v/TjrShuj_Zsg/?t=534) And I think, thank God we did, because in 26, we still won't have enough compute. Where are we on the compute continuum? There's kind of choke points everywhere. And I think they will continue to move back and forth. I mean, you all talk about this and know this as well as anyone here. Whether it's energy, first and foremost, land power, how we get regulatory environments such that we can build quickly.

[9:21](https://realalpha.app/v/TjrShuj_Zsg/?t=561) When you get into the racks and chips themselves, clearly, do we have enough in that supply chain? Memory spike is on at the moment. Access to great talent. Do we have enough people coming through our education system? I really worry about this right now. I'm a trustee at Stanford, and I see that we need to keep the focus on education and science. And then trust. I mean, I actually put that as part of the supply chain.

[9:48](https://realalpha.app/v/TjrShuj_Zsg/?t=588) Sam right now is in Saline, Michigan. He's going to be cutting the ribbon in about two hours, so you are getting a sneak preview. But they told me it was okay to say it in the room. That will be, you know, sticking shovels in the ground on a one gigawatt data center, which is part of our Oracle complex. Really important there on the trust side that we don't leave communities behind. I spent seven years of my life working at Nextdoor, doing the hard work of what it means to be local.

[10:14](https://realalpha.app/v/TjrShuj_Zsg/?t=614) and you cannot tell people from top down what they need because they will tell you, thank you, but no thank you. I will tell you what I need. And so in a data center like that, we're actually spending a lot of time in the community saying, number one, we're not going to raise your electricity bills. We're going to pay for our infrastructure and our power. It will not be the rate payer that has to pay.

[10:34](https://realalpha.app/v/TjrShuj_Zsg/?t=634) Number two, we're going to bring jobs, 2,500 union jobs, good jobs, like electricians, HVAC and so on. We are going to pay our taxes, a billion dollars in taxes just for that data center into Michigan. And on top of that, we're going to invest $45 million going into education for Codex credits to do what you all talked about this weekend. It's like anyone who's not coming in facile to their new job.

[11:02](https://realalpha.app/v/TjrShuj_Zsg/?t=662) I have teenagers using Codex. It would be like I would never hire a finance person who didn't know how to use Excel. And I pretty much probably wouldn't hire a finance person today that doesn't know how to use a tool like Codex. so that you know so when I think about investment we're having to invest ahead of demand that means we need to both be able to find all of the compute and all the pieces and then pay for it so that goes back to your capital question on IPO and then on the other side on the economics look the economics do continue to get better they're getting better on multiple fronts I think we are doing a better job of actually showing true value to our customers and I think you get beyond kind of a cost-plus type pricing into something that feels more akin to the value being created.

[11:45](https://realalpha.app/v/TjrShuj_Zsg/?t=705) Now, scarcity of tokens helps because it's causing a bit of a compression in cost. Talk about that in just, like, without specific names, where you know the landscape exists today in terms of all the power that's available and all the demand that exists? this across everybody. What's going to happen over the next year, just at the current course and speed of what is available, of the data centers that's available, of the tokens that's available, of the infrastructure that's available, for everybody?

[12:13](https://realalpha.app/v/TjrShuj_Zsg/?t=733) Because, you know, I told this story last week, but, you know, I'll use Anthropic, and one of the frustrating things is at some point it just says, you know, 10.30, it's like, all right, Chamath, see you at 2.30. Yeah. And that's not a viable experience. Right. And in fairness to ChatGPT, actually, I've never had that with... Yeah, we're quite generous with our tokens. And again, on purpose, we're trying to drive access so people understand.

[12:37](https://realalpha.app/v/TjrShuj_Zsg/?t=757) Because if you're on that free tier, not actually getting the latest model, but we're trying to put it in your hands so you get a sense for it, by the way. Because, you know, if you're a kid doing homework, like I think about when I grew up and the Encyclopedia Britannica showed up at the front door in Northern Ireland in a tiny little community in the middle of the Troubles. It was like the clouds parted.

[12:58](https://realalpha.app/v/TjrShuj_Zsg/?t=778) And so we want to make sure that people get that feeling, by the way. But the landscape right now, in 26, if you want to buy more compute, good luck to you. Like, tell me, because I don't know where else to find it. I mean, as you know, Elon has some. Well, I was going to say, Elon, ironically, ended up being the one person that had too much compute, in a way. But good job on, like, figuring out how to sell that off.

[13:22](https://realalpha.app/v/TjrShuj_Zsg/?t=802) In 27, it's pretty limited as well, frankly. Now, there's a couple of things shifting around. When we talk about compute, there's training that mostly still all happens here in the United States for USG reasons, for making sure that a national asset in effect is happening on U.S. soil. For inference, we want that to be global. And I think particularly in an agentic world, you want much more kind of real time, even for things like Sora and video, which, by the way, yeah, we have, you know, we had to make a really tough choice because we didn't have enough compute.

[13:55](https://realalpha.app/v/TjrShuj_Zsg/?t=835) And it uses a lot. Right now, yeah, video does, but video is not over. Like, in particular, when you start to think about where AI is taking us into more multimodality. So, remember, we've all been taught by the last generation of technology to talk with our thumbs. It's a disease. You walk around, everyone's looking down, they don't look up anymore. Teenagers sit on my sofa at night and talk to each other with their thumbs.

[14:22](https://realalpha.app/v/TjrShuj_Zsg/?t=862) I'm like, who are you talking to? And my son will be like, him. I'm like, okay, talk. Multimodality is here. Hopefully, I think you all talked about it this weekend. You're talking to your tool. I talk to Codex every day. And so that is changing rapidly.