Despite the explosive growth in its activities, OpenAI’s expenses are expected to continue to far exceed its revenue
OpenAI is expected to “burn through” by the end of 2030, as the massive investments required for computing power and infrastructure are driving up the company’s long-term funding needs.
According to a recent OpenAI presentation reviewed by the Financial Times, the creator of ChatGPT forecasts negative free cash flows totaling $278 billion over the five-year period from 2026 to 2030, as it invests aggressively to secure greater access to the computing power required for the development of artificial intelligence.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
At the same time, OpenAI is in new investment talks, seeking a valuation higher than $1.2 trillion.
Revenue of $350 billion by 2030
Despite the explosive growth of its operations, expenses are expected to continue to far exceed revenue.
OpenAI forecasts that its revenue will increase tenfold, from $36 billion this year to $350 billion in 2030. In total, it estimates it will generate $840 billion in revenue from now through the end of 2030.
The company must therefore convince investors—many of whom have already invested tens of billions of dollars— to continue funding its highly aggressive investment plan, with the promise that future returns will justify their trust.
According to the FT, OpenAI, which is currently valued at $852 billion, has entered into discussions for yet another major funding round. Investors have approached the company proposing an investment at a valuation of $1.2 trillion, but OpenAI is seeking an even higher valuation, according to a person close to the company.
The $856 billion bill
The bulk of the cost comes from computing power and infrastructure. OpenAI projects that by the end of 2030, it will have spent approximately $856 billion in these two areas, which by far constitute its largest expense category.
The company’s ability to secure the funding it needs is critical not only for itself but also for the broader ecosystem of partnerships that has formed around it.
Major technology conglomerates—from Nvidia to Oracle and SoftBank’s data center operations—rely heavily on contracts with OpenAI for their future revenue.
The projected “cash burn” reflects the pressure the company’s growth model is putting on its finances. OpenAI raised $122 billion in March; however, based on the projections included in the presentation, it is on track to exhaust those funds by 2028.
The Battle with Anthropic and Chinese Models
To maintain its high growth rates, OpenAI needs to invest hundreds of billions of dollars in data centers and computing power, both for training and for running its models.
At the same time, it has implemented significant price cuts, in an effort to gain market share from its American competitor Anthropic and counter the threat of cheaper Chinese “open-weight” models.
There are, however, signs that the massive investments are beginning to pay off. The launch of new models led to an approximately 20% increase in OpenAI’s annualized revenue in July.
At the same time, the current forecast for negative free cash flow of $278 billion is an improvement over the previous estimate in May, when the company had estimated the figure at $305 billion.
IPO Postponed
OpenAI had originally planned to proceed with an initial public offering (IPO) this fall and had already filed the relevant documents confidentially with the U.S. Securities and Exchange Commission (SEC) in June.
It subsequently postponed the process, however, citing growing public concern about the risks associated with the rapid development of artificial intelligence systems.
Some investors cited by the FT believe that the delay is also driven by fears about how the stock markets will react to a company that continues to post such large losses.
Meanwhile, rival Anthropic is expected to go public this fall, in what could become the largest IPO of all time. OpenAI declined to comment.
Source: in.gr
