OpenAI Doesn’t Expect to Be Profitable Until 2029
OpenAI‘s backers are a long-ish way from making money. Recent financial projections indicate the AI powerhouse won’t turn a profit until 2029. This timeline presents a significant test of investor patience and confidence in the company’s long-term potential.
According to documents obtained by The Information, OpenAI anticipates substantial losses in the coming years, potentially reaching $14 billion annually by 2026. The company projects cumulative losses of $44 billion between 2023 and 2028, highlighting the massive capital requirements of cutting-edge AI development.
The company’s ambitious plans, which have also been described as a fever dream, include reaching $100 billion in annual revenue by 2029, coupled with approximately $200 billion in expenditures through the decade’s end.
For investors, including Microsoft which is reportedly entitled to 20% of OpenAI’s revenue, the company’s ability to deliver groundbreaking AI advancements will be crucial in justifying its massive valuation and maintaining investor confidence during years of projected losses.
OpenAI recently secured $6.6 billion in funding from backers including tech giants Microsoft (Nasdaq: MSFT) and Nvidia (Nasdaq: NVDA), valuing the company at $157 billion.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
