OpenAI Facing $14 Billion Loss by 2026, Despite AI Boom

According to financial documents obtained by the media, due to the high cost of training artificial intelligence, OpenAI, which leans on Microsoft, is expected not to achieve annual profitability until 2029.

It is understood that a large part of OpenAI's expenses will be used for training its AI models, with the annual cost expected to reach as high as $9.5 billion by 2026. Moreover, the company estimates that it will spend more than $200 billion by 2030, with 60% to 80% allocated to model training and operation.

Given these huge expenditures, OpenAI is expected to incur losses of $44 billion from 2023 to 2028, with a loss of $5 billion this year, and the annual loss may reach as high as $14 billion by 2026, which is nearly three times the expected loss this year. It is worth mentioning that this estimate does not include stock-based compensation, which is one of OpenAI's largest expenditures, although it is not paid in cash.

The company's annual revenue is expected to reach $100 billion by 2029, which may turn losses into profits.

OpenAI also believes that in the next few years, ChatGPT will continue to be its main source of revenue, far exceeding the revenue from selling AI models to developers through application programming interfaces (APIs). In addition, according to predictions, by the end of 2025, the sales of its new products will exceed API revenue, reaching nearly $2 billion.

Although the specific forms of these new products are still unclear, insiders have revealed that OpenAI is developing intelligent agents and research assistants that utilize personal computers to handle complex tasks; OpenAI has also discussed launching a subscription service for its most advanced technology at a higher price. Other products that have not yet been fully launched include the Sora video generator, which is seen as a direct competitor to Google Search; and software designed specifically for robot developers.

In comparison, the growth of API sales will significantly slow down. Perhaps because in this area, OpenAI faces strong competition from competitors such as Anthropic, Microsoft, and Google.

Last week, OpenAI completed its latest round of financing, totaling $6.6 billion, which valued the company at $157 billion. Both Microsoft and Nvidia participated in this round of financing.