OpenAI appears to be losing money out the wazoo.
An analysis by The Register of the latest earnings report from its key partner Microsoft, released Wednesday, suggests that the ChatGPT maker lost $11.5 billion last quarter — a figure that epitomizes the dizzying spending driving the AI industry.
Those losses come as OpenAI completed restructuring its for-profit arm, which is still nominally controlled by a non-profit, into a public benefit corporation last week, a move that allows it to raise and make money more like a typical for-profit company.
It will also allow OpenAI to list itself on the stock market, and reporting from Reuters suggests that it’s already preparing an initial public offering that would value the company at $1 trillion — double its current worth — suggesting that’s is gunning to have one of the biggest IPOs of all time.
At the same time, though, there’s the problem of the company’s actual financial situation. OpenAI’s towering third quarter net losses is an estimate based on US Securities and Exchange Commission filings from Microsoft, which owns a large stake in OpenAI. In one passage, Microsoft reveals that its current net income was weakened by losses from its investment in OpenAI, subtracting $3.1 billion from its profits. Based on Microsoft’s latest disclosure that it owns 27 percent of OpenAI following the recent restructuring, that translates to around a $11.5 billion loss this quarter alone.
It’s never been a secret that OpenAI is burning through cash, and to an extent it’s expected that rapidly expanding tech startups with dreams of market domination would lose money for a while.
But $11.5 billion in a single quarter is a lot even by AI standards. Compare it to its projected revenue, and it’s a big chunk: according to Reuters sources who spoke about OpenAI’s planned IPO, OpenAI expects to make $20 billion by the end of the this year. Moreover, according to recent reporting from The Information, those losses are nearly equal to the amount OpenAI reported losing in the entire first half of 2025, $13.5 billion, during which it only generated $4.3 billion.
OpenAI isn’t letting immediate term questions of money slow it down, and is riding high on estimates that it will hit a revenue of $200 billion in 2030, thanks to the unprecedented popularity of ChatGPT. Though the chatbot currently boasts an astonishing 800 million active weekly users, the vast majority use the service for free. As of April, only 20 million pay for premium tiers, which doesn’t count corporate or business users.
In the meantime, its capital expenditures are going through the roof as it expands its data center empire to meet the expected growing demand, including a deal with Oracle to purchase $300 billion worth of computing power over five years. Listing itself on the stock market should bring in more money, but the venture will also be a test of how robust public and market hype for its tech will be, exposing it to potential losses if enthusiasm dies down. Meta’s recent market woes could be a preview of such a blowback of skepticism: on Thursday, after CEO Mark Zuckerberg announced on an earnings call that Meta would spend up to $72 billion on AI this year, its stock plunged by 11 percent, wiping out over $200 billion in value.
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