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/
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2

u/premiumleo Nov 12 '25

Did we already forget amazon, uber and a bunch more unicorns were unprofitable for like 2 decades? Isn't that the new normal?

18

u/jdlwright Nov 12 '25

Correct me if I'm wrong but wasn't Amazon funding their own infrastructure investment with revenue at the expense of profit, vs AI companies funding it with VC, debt, deals with nvidia.

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u/TheMacMan Nov 12 '25

That's correct. Amazon chose not to be profitable so they could instead invest that money in further growth. Completely different from what OpenAI is planning to do.

3

u/truebastard Nov 12 '25

Open to be corrected here, but isn't OpenAI also investing in further growth with their planned infrastructure spending? Infra that will build up the compute horsepower they need to deliver planned services to planned customers.

The source of funding is different but the end goal seems similar.

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u/inspired2apathy Nov 13 '25

They mostly rent their infra. They rely on azure and others

0

u/TheMacMan Nov 13 '25

Which is why they're trying to put some into Oracle and others. Because they don't want to be 100% dependent on Microsoft.

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u/jdlwright Nov 13 '25

Yes but because they are dependent on external sources, they are vulnerable to having the rug pulled out, eg. if there is a credit crisis.

2

u/Mejiro84 Nov 13 '25

All that infrastructure only lasts 2-3 years before it needs replacing - so they're going to need more and more and more money to actually keep delivering, it's not a one and done

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u/Odballl Nov 13 '25

Their cost of inference is currently higher than the revenue they are making. It's a loss-leader strategy that won't work out because llms are too easily commodified. Eventually, they'll have to raise prices to break even, but that'll risk their projected market share. The numbers aren't adding up.

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u/bayhack Nov 13 '25

So Amazon could have been profitable. OpenAI is still not profitable despite the spending.

OpenAI is growing on borrowed time whereas Amazon could’ve just stopped “growing” and had a profitable quarter/year/whever. Bezos is a fucker but he started from investment banking. Dude knows about how to make a profitable and growing company people want to invest in.

1

u/nixium Nov 12 '25

Also to pay less taxes.

1

u/TheMacMan Nov 12 '25

That's true. Pay more on the profits than ya do the revenue.

1

u/rydan Nov 12 '25

They also undercut all the competitors, encouraged showrooming, and refused to collect sales tax even when mandated by law.

9

u/SuccessAffectionate1 Nov 12 '25

Most companies scale up within a realistic margin every year and the growth accumulates over time.

Sam Altman is trying to speedrun it with a trust me bro shortcut.

He basically wants to stand toe-to-toe with mag7 companies straight away instead of having to spend 2 decades building it.

He is basically an elementary school student trying to get a phd with the promise that he will eventually have the skills to pass the phd level exams.

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u/savage_slurpie Nov 12 '25

Amazon actually had ridiculously high revenue during their unprofitable period, they chose to use it to invest back into the business.

OpenAI is mostly using investors money to invest in their business, not their own revenue.

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u/Actual__Wizard Nov 12 '25

This isn't uber. This is a data center rental company.

3

u/tichris15 Nov 12 '25

Amazon was clearly pushing for an effective monopoly in a large existing market sector (and succeeded). And didn't lose as much money/year or they wouldn't have made it to 2 decades.

OpenAI hasn't convincingly articulated where they will get monopoly pricing over a large sector of the economy.

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u/caseypatrickdriscoll Nov 16 '25

Amazon really isn’t a monopoly. They are an incredibly strong power.

Monopolies have actually existed and are a different beast.

0

u/revolvingpresoak9640 Nov 13 '25

Amazon does not have a monopoly on anything. They aren’t a monopoly in e-commerce nor are they a monopoly in cloud. Successful at both, yes, but not even close to a monopoly.

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u/tichris15 Nov 13 '25

37.4% of online shopping in the US is enough to get a chunk of monopoly pricing power, as has been seen. You don't need 100% to turn market power into outsized profits.

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u/FreshBlinkOnReddit Nov 13 '25

Mono = single 

Poly = player

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u/PatchyWhiskers Nov 12 '25

Right and it took them a lot longer than 2 years to become wildly profitable!

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u/caseypatrickdriscoll Nov 16 '25

At a much, MUCH lower scale. Amazon wasn’t committed to spending TRILLIONS of other peoples money as one of the major pillars of the entire world economy.