"The documents, which were shared with investors this summer, reveal an aggressive growth strategy that hinges on massive upfront investment in computing infrastructure, chips and data centers-spending that CEO Sam Altman has described as necessary to meet what he sees as insatiable demand for AI capabilities. The company anticipates burning through roughly $9 billion this year on $13 billion in sales, a cash burn rate of approximately 70% of revenue."
"But the financial trajectory only gets steeper before it improves. The documents show OpenAI projects that by 2028, its operating losses will balloon to roughly three-quarters of that year's revenue, driven primarily by ballooning spending on computing costs. That's the same year competitor Anthropic expects to break even, according to WSJ."
"OpenAI's plan relies on what amounts to a bet on dominance. The company recently announced it has signed up to $1.4 trillion in commitments over the next eight years for computing deals with cloud and chip giants. It's spending almost $100 billion on backup data-center capacity alone to cover unforeseen demand from future products and research."
OpenAI plans to accept large operating losses through the late 2020s while investing heavily in computing, chips and data-center capacity to meet surging AI demand and pursue dominance. Financial documents project roughly $9 billion burned this year on $13 billion in sales and operating losses peaking around $74 billion in 2028, roughly three-quarters of that year's revenue. The company has secured about $1.4 trillion in multi-year computing commitments and is allocating nearly $100 billion for backup data-center capacity. Competitor Anthropic projects a faster reduction in cash burn and earlier break-even, while OpenAI expects burn rates near 57% in 2026–2027.
Read at Fortune
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