According to financial documents, OpenAI, backed by Microsoft (MSFT, Financial), is not expected to achieve annual profitability until 2029. The documents reveal a potential annual loss of up to $14 billion by 2026. Revenue for 2029 is projected to reach $100 billion, although the company plans to spend approximately $200 billion by the end of the decade, excluding stock-based compensation. Total losses between 2023 and 2028 are anticipated to sum up to $44 billion.
A major portion of OpenAI's expenses is allocated to training AI models, with yearly costs expected to hit $9.5 billion by 2026. It's estimated that 60% to 80% of the over $200 billion expenditure will focus on training and running models. Additionally, Microsoft currently extracts a 20% share from OpenAI's revenues, which exceeds earlier expectations.
Recently, OpenAI completed a fundraising round of $6.6 billion, raising the company's valuation to $157 billion. Both Microsoft and Nvidia (NVDA) participated in this latest investment round.
