The news: OpenAI, now 10 years old, is expected to accrue about $143 billion in negative cumulative free cash flow between 2024 and 2029 before it starts turning a profit, per Deutsche Bank.

“No startup in history has operated with losses on anything approaching this scale. We are firmly in uncharted territory,” Deutsche Bank analysts wrote.

Zooming out: While it takes time for most tech companies to reach profitability, OpenAI’s path is unique in the magnitude of its losses.

• Uber lost about $18 billion over six years before it started accumulating consistent free positive cash flow in 2022, per EMARKETER analysis.
• Amazon took almost five years and about $1 billion.
• Tesla's first consistently profitable year took nine years and $9 billion.
• Google’s cloud business became profitable in 2023—three years after it started reporting cloud results—and lost $186 million in Q4 2022 alone, per CNBC.

Founded as a nonprofit without a monetizable product, OpenAI has always been structurally different. Even now, the company is expected to move slower than its peers—Anthropic is projected to break even by 2028, per The Wall Street Journal.

Why it matters: Concerns around an AI bubble are mounting as Big Tech players plan astronomical investments—some in the trillions—in AI data centers, servers, and chips. OpenAI is a key player in this spending spree, with an estimated $1.4 trillion in data center commitments, per Deutsche Bank.

• The company may be in trouble if it rests upon its laurels too much and doesn’t convert more of its over 800 million weekly active users into paying customers.
• “I think there are some players who are not managing (the risk of overinvesting) well or taking unwise risks,” Anthropic CEO Dario Amodei said during a DealBook Summit Q&A.

The challenges: The economics of AI and monetization models for AI products are inherently complex.

• Subscription prices must be high enough to cover computing expenses but low enough to compete with free tiers and tools. OpenAI CEO Sam Altman revealed this year that the company is losing money on its Pro subscriptions.
• Unlike Google, Meta, and Amazon, OpenAI doesn’t have diversified streams of income—such as ads, cloud services, or data monetization—to offset its AI costs. Those extra revenue streams have let players like Meta lose billions on experimental ventures without going into the negative.

These challenges place considerable pressure on OpenAI to innovate quickly and maintain ChatGPT’s lead while relying on funding rounds.

• Altman recently issued a “code red” to his staff, ordering them to prioritize ChatGPT improvements amid rising competition. This could bolster ChatGPT performance but deprioritize potentially lucrative ventures, such as ad products.
• Its GPT-5 model launch was largely panned, and the company was pushed to restore access to older models within a day.

What it means for the industry: OpenAI competes not only with others but with the weight of its own business model. The company is no longer a mere startup, but its finances reflect a business that hasn’t firmly navigated the economics of developing, deploying, and monetizing AI at scale.

This could force the industry to reconsider its obsession with ever-larger models and foreshadow a correction in the AI sector if revenues keep lagging behind escalating spending. The next few years may reward those who find sustainable monetization models, not necessarily those who build the most powerful tools.

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