OpenAI is one of the biggest AI companies in the world with some of the most powerful models on the market. Also, it probably has the highest number of paying subscribers pumping money into it. Regardless, the company is still burning through money at an alarming pace. According to a new report, OpenAI’s losses could double next year, and keep rising after that.
At the moment, OpenAI is a non-profit company, so it gains most of its money from investments. We all know the $13 billion that it got from Microsoft, but it gains money from other investors. This is the reason why it’s able to stay afloat because the losses that the company incurs far outweighs the money it’s gaining.
The company plans on bringing in $3.7 billion in revenue, but that’ll be more than offset by the $5 billion in projected losses. It was able to secure more than $6 billion from investors during its latest round.
OpenAI’s losses could double next year
$5 billion in losses is no small amount, as training AI models is an expensive endeavor, and the bill is rising. However, that might be chump change compared to the losses it could have next year. The report states that OpenAI could burn through more than $11 billion next year, more than doubling its losses this year. Powerful AI has a price, and the investors are the ones paying this massive tab.
The question is: how long are they going to put up with the company’s losses? OpenAI could burn through $11 billion in 2025 but that number could balloon to $14 billion in 2026, which is almost triple that of 2024’s losses.
All in all, OpenAI might not turn a profit until 2029! This coincides with the fact that the company plans for a ChatGPT Plus subscription to cost $44/month in the next five years.
OpenAI wants to be a for-profit company
OpenAI’s fortunes are a hot topic, as it plans on becoming a for-profit company within the next couple of years. If it can reach its for-profit status in time, it could gain another billion dollars from Thrive Capital.
So, if the company wants to turn a profit while pumping more money into its models, prices for all of its services will rise exponentially over the years. Let’s hope that this doesn’t turn people away from its products.
