OpenAIs Internal Projections Reveal Aggressive Growth Strategy and Steep Losses
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Internal Forecasts Reveal High Risks for OpenAI Investors
OpenAI's internal financial projections reveal an aggressive growth strategy coupled with massive losses and a heavy reliance on partners like Microsoft, according to documents seen by The Information.
Rapid Growth Expected With High Losses
The AI company aims to increase revenue to $100 billion by 2029, a hundredfold increase from 2023. However, OpenAI does not expect to become profitable before 2029. Losses could triple to $14 billion by 2026, excluding stock-based compensation, The Information reports, citing an "analysis of data contained in OpenAI’s financial documents."
Enormous Capital Requirements and High Operating Costs
OpenAI has already burned through $340 million in the first half of 2024, leaving $1 billion in cash on hand before its last financing round. The company expects to lose a total of $44 billion between 2023 and 2028.
Training and operating AI models will account for 60-80% of expenses. For 2026 alone, OpenAI expects training costs of $10 billion, plus $5 billion for research. Dario Amodei, CEO of Anthropic, also projected AI training costs of up to $10 billion for 2026.
OpenAI’s gross margin of 41% is significantly lower than the industry average of 65% or more for cloud software startups. The company aims to increase this to 67% by 2028.
ChatGPT as the Main Revenue Driver
OpenAI expects ChatGPT to remain its most important revenue generator, significantly exceeding API sales to developers. Prices for ChatGPT could double by 2029. New offerings such as video creation and robotics software could surpass API sales by the end of 2025, reaching nearly $2 billion in revenue.
The forecasts suggest that OpenAI will continue to try to cover as many AI applications as possible internally, making ChatGPT the center of much of office work. CEO Sam Altman has warned that AI startups without clear differentiation from OpenAI's products could be "run over" by the company's model progress.
Rising Personnel Costs, Decreasing Data Costs
Personnel costs are expected to rise from $700 million in 2024 to $2 billion in 2025. Interestingly, OpenAI expects data costs to decrease, suggesting less reliance on external data sources.
The company has signed numerous media licensing agreements, primarily to integrate up-to-date content into its planned SearchGPT product, which is expected to become part of ChatGPT once it is complete.
Computing costs remain unclear. Microsoft appears to be offsetting some cloud costs through investments in the form of credits. OpenAI is also planning investments in data centers and custom AI chips, which may incur costs that are not yet fully reflected in these forecasts.
Conclusion: Risk and Opportunity for Investors
OpenAI's ambitious growth plans are associated with significant financial risks. High losses and dependence on partners like Microsoft pose challenges for investors. At the same time, the rapidly growing AI market holds enormous opportunities. Whether OpenAI can achieve its ambitious goals remains to be seen.
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