The reality of OpenAI's $122 billion 'VC round': vendor contracts, conditional capital, and guaranteed returns that may be hard to bear

The $122 billion funding round announced by OpenAI is far from a traditional VC investment. The actual immediately secured cash is only about $37 billion, with the rest in the form of conditional capital or vendor contracts.

Of Amazon's $50 billion, $35 billion is conditional capital dependent on an IPO or achieving AGI. OpenAI has also committed to spending $100 billion on AWS infrastructure over 8 years, which is more in the nature of a customer contract than a pure investment.

Nvidia's $30 billion is not cash but comes in the form of compute capacity (computing resources for inference and training). Instead of cash, OpenAI receives computing credits in a structure where it secures 3GW of inference and 2GW of training capacity through the Vera Rubin system, which is closer to packaging a vendor relationship as an equity investment.

SoftBank's $30 billion is structured in tranches, paid out in 3 installments within 2026. On the other hand, the $12 billion raised with participation from a16z, D.E. Shaw Ventures, MGX, and others is closest to actual investment in the traditional sense.