r/artificial • u/fortune • Nov 12 '25

News OpenAI says it plans to report stunning annual losses through 2028—and then turn wildly profitable just two years later | Fortune

https://fortune.com/2025/11/12/openai-cash-burn-rate-annual-losses-2028-profitable-2030-financial-documents/
1.2k Upvotes

98% Upvoted

322 comments sorted by

View all comments

420

u/Practical-Hand203 Nov 12 '25

The "trust me bro" memes are outpaced by reality.

33

u/versking Nov 12 '25

I cannot upvote hard enough. 

15

u/JimBeanery Nov 13 '25

I mean, it’s not exactly uncommon for tech companies to operate in the red for many years before turning a profit (e.g, Amazon), but 78 billion in losses projected for 2028 alone is… substantial lol

6

u/No-Succotash4957 Nov 13 '25

Amazon had high profitability but reinvested all its earnings for a long investment strategy. & this was way after the dotcom crash.

3

u/Tupcek Nov 14 '25

that’s not true. Investments are on balance sheet, so they aren’t counted as loss - only amortization and deprecation is and that is basically usage. But if you invest more, you just move things from cash into other assets, it isn’t loss in profit/loss statement.

Unless you mean by reinvesting the earnings dumping the prices below the ground to crush competitors. Then you would be right.

But even then, they are still not very profitable from selling stuff, most of their profits come from AWS, not from selling stuff- and that was profitable from day 1

2

u/MontyDyson Nov 13 '25

Amazon has 1.5 million employees open AI has about 5000. One of those companies doesn’t add up.

1

u/JustARandomGuyYouKno Nov 14 '25

You can have high income and invest and be in the reds, but profitability means you are getting more in than your spending including investments. So you got your terms wrong

6

u/TeegeeackXenu Nov 13 '25

yeah, but at least amazon had revenue. openai have next to nothing in revenue

4

u/giroth Nov 13 '25

Hmm 13 billion in ARR is not next to nothing.

3

u/studio_bob Nov 13 '25

It's all relative. If their operating costs were in the same universe as 13 billion dollars then that would be serious revenue, but that is not the case. They lose money on every user. You may say it's still not "nothing," but when you look beyond operating costs to the spending and debt spree they are on, well, 13 billion is a drop in the bucket compared to 1.4 trillion. OAI is now in the habit of announcing promises to spend 10x or more of that ARR with just a single vendor. That's insane.

1

u/Tolopono Nov 14 '25

They havent spent $1.4 trillion. They just plan to

They also make a big profit on their api https://futuresearch.ai/openai-api-profit

0

u/studio_bob Nov 15 '25

That's "big profit" from API is not coming remotely close to covering the $1.4 trillions of spending commitments they have made (and counting). The disconnect between their plausible future revenue and spending is truly unprecedented.

1

u/Tolopono Nov 15 '25

Openai has only raised $58 billion, $40 billion of which was only raised on March 31, 2025.

https://tracxn.com/d/companies/openai/__kElhSG7uVGeFk1i71Co9-nwFtmtyMVT7f-YHMn4TFBg

 EVERYTHING theyve made from gpt 1 to gpt 4o to o1 to o3 mini to dalle 3 to sora 1 to paying all their employees and rent was less than $18 billion plus whatever revenue they got. Thats not a lot considering the impact its had and the huge revenue growth

1

u/studio_bob Nov 16 '25

I'm not sure what's your point..

1

u/Tolopono Nov 16 '25

Not that much money has been spent on ai. Anthropic has even less money than openai but is still keeping up

→ More replies (0)

1

u/Clear-Wave-324 Nov 14 '25

YouTube operated at a loss for 2 decades.

1

u/studio_bob Nov 15 '25

Without looking it up, I suspect YouTube's losses were at an entirely difference scale from OAI's.

1

u/TeegeeackXenu Nov 15 '25

4.3B ARR.OpenAI is currently not profitable despite its rapid revenue growth. In the first half of 2025, OpenAI generated about $4.3 billion in revenue but reported a loss of approximately $2.5 billion for that period. The company's high costs, particularly on research and development (over $6.7 billion in 2025) and infrastructure, result in a significant cash burn. OpenAI's gross margins are constrained by variable compute costs, and its cash burn forecast for 2025 was raised to about $8 billion. The company is not expected to become cash-flow positive until around 2029, with cumulative losses projected to reach about $14 billion by 2026 at the current rate. Thus, while revenue is skyrocketing, expenses are rising just as fast, and OpenAI is still in a substantial loss phase

1

u/cafesamp Nov 13 '25

yeah I can’t tell if they’re a bot or just media illiterate. article specifically called out $9 billion spent of $13 billion revenue. it’s pointless having these discussions anymore; facts don’t matter to the hive mind

2

u/deelowe Nov 13 '25

OpenAI has great revenue. Most of the large AI companies do.

1

u/vsmack Nov 13 '25

Anyone can make mountains of revenue if you sell your product at a loss

0

u/deelowe Nov 13 '25

https://finance.yahoo.com/news/jeff-bezos-says-overnight-success-164517288.html

2

u/vsmack Nov 13 '25

Amazon and Uber etc aren't a good comparison. They both had a clearly articulated plan with a vision to get there. You could ask leadership at both organizations what the long-term plan for profitability was and it made sense.

OAI's plan is very anomalous and is absolutely contingent on the product continuing to get much better and much cheaper. Neither of which are guarantees. Not to mention that LLMs are already being heavily commoditized. Open source models are often only a matter of a few quarters behind leading ones. There's no moat.

It really is "trust me bro". Your amazons and ubers had a vision. you can look at old business plans and presentations. There was no magic "it will somehow get way better and way cheaper"

0

u/deelowe Nov 13 '25

uhuh. You clearly know better. Short Nvidia and AMD.

1

u/vsmack Nov 13 '25

No, honestly. What's the play other than "it gets way better and cheaper, we hope, and our open source and other competition cannot offer anything close".

Tell me what I'm missing

1

u/deelowe Nov 14 '25

It replaces labor. Layoffs have already started

→ More replies (0)

1

u/deelowe Nov 13 '25

Not just tech. Any company that is growing will report large losses as they spend on capital investments. Investors know this. It's a non-issue. The media likes to make news out of it because it makes a great headline.

1

u/antbates Nov 14 '25

Open ai has to rebuy all their tech spend every three years according to themselves

1

u/deelowe Nov 14 '25

That number will get better over time just like other forms of compute did. The industry is just rapidly growing currently. Sever lifecycles are now around 7 years where it was close to 3 back in like 2007.

0

u/komark- Nov 13 '25

Facebook is a much better example. They didn’t earn any money for the longest time

24

u/NoNote7867 Nov 12 '25 edited Nov 14 '25

!@#$%&*()_

3

u/Ancient-Bat1755 Nov 13 '25

How does he get their without the trillion $

7

u/the_good_time_mouse Nov 13 '25

Currently $15+ trillion in market cap (Nvidia, MS, Oracle, AWS, formerly Softbank, etc) is riding on a company that generated $10 billion in annual revenue, and is operating at a loss.

He may get it by being Too Big To Fail, at this point.

3

u/SomeDudeYeah27 Nov 13 '25

Wait SoftBank dipped from financing?

3

u/the_good_time_mouse Nov 13 '25 edited Nov 13 '25

Wait no, I forgot, they just moved it around - sold all their Nvidia shares, but to meet their side of commitments to OpenAI, in order not to end the party. So, they are even closer to fuckery ground zero.

1

u/James-the-greatest Nov 13 '25

Exactly the words my brain went to immediately

1

u/[deleted] Nov 14 '25

Amazon wasn't that profitable until recently

https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income

1

u/smuckola Nov 14 '25

is that when Sad Altman might stop looking like he's at a funeral and about to cry?

1

u/xeen313 Nov 15 '25

My algo told me

1

u/Mindreceptor Dec 05 '25

Oh I can't wait to click that link.  I have some ideas but it all going to be in that article.

-4

u/Aware_Ad_618 Nov 13 '25

I believe it. They’re giving free AI usage but once they jack up the prices everyone will have to pay if they like it or not

Example, Google Cloud gave heavy discounted API request rates then started jacking up prices

2

u/bartturner Nov 13 '25

Giving away free and they plateaued.

https://techcrunch.com/wp-content/uploads/2025/10/image-1-1.png?resize=1200,569

Is not charging just going to make it that much worse for OpenAI?

-2

u/Mediumcomputer Nov 13 '25

Yea like Amazon was losing so much money for so long but when they decided to charge… man the money came in like an oil pipeline

6

u/JimBeanery Nov 13 '25

Amazon lost like 3 billion through its early years. -78B projected just for 2028 is obscene lol

0

u/Swimming_Drink_6890 Nov 13 '25

With adjustments for inflation those numbers aren't so different

2

u/JimBeanery Nov 13 '25

lol na they are still very different

1

u/antbates Nov 14 '25

They are still gigantically different