OpenAI's Mounting Losses: Billions Spent, Profits Elusive

Synopsis

Despite the company's revenues increasing, OpenAI has reported financial losses of $5 billion in 2024 and almost $8 billion in 2025. Compute costs, model training, and fast growth in the number of employees all contribute to its widening gap between revenue and expenditure. Deutsche Bank expects a negative $143 billion cash flow over the next four years, before turning profitable. The issue for the AI industry is not whether or not OpenAI will expand, but will it expand quickly enough?

The Numbers Behind the Hype

In 2025, ChatGPT reached 800 million monthly active users.800 million users of ChatGPT were active each week in 2025. But the firm that owns it is losing money, according to any normal measure.

In 2024, OpenAI generated $3.7 billion in revenue, but incurred a net loss of $5 billion, which does not include equity-based compensation provided to employees. The next year was worse. The company ended up with a loss of almost $8 billion in 2025 despite the monthly revenues increasing towards $1.66 billion by December, indicating an annualised run rate of approximately $20 billion.

The trend is always the same: an increase in income, a greater increase in expenditure. OpenAI's expenses for 2024 were $2.37 per dollar of revenue earned. This ratio had reduced to $1.60 per dollar by 2025, which while better, is still not sustainable.

What is draining the reserves?

Computing is the primary expense for OpenAI. In 2024, training its models cost $3 billion, while its revenue from 2024 was $2 billion from its models.

Staff expenses have also gone sky-high. The company's research and engineering staff is expected to grow, with salary and staff expenditure projected to increase from $700 million in 2024 to $2 billion in 2025.

Looking forward, it's a clear path. OpenAI estimates that 60-80% of its spending in 2026 will be on AI model training and operations, and that it will spend $10 billion on model training alone, along with an additional $5 billion on research.

Scale Without Precedent

Deutsche Bank's take on OpenAI finances is rather harsh. That has never happened with any startup in history," said the bank's analysts, who estimate that the company will have $143 billion in negative cumulative free cash flow from 2024 to 2029.

To put this in perspective: Uber posted a net loss of approximately $18 billion over a six-year span before becoming profitable; Amazon went through five years of losses and $1 billion and then became profitable; Tesla went 9 years and $9 billion before it was profitable. But all of them are dwarfed by the course that OpenAI plans to pursue.

The Monetisation Problem

The ChatGPT has only 5 per cent of its 800 million users paying for its premium subscription. That's a ratio that's been a worry for observers for a long time. While it has consumer subscriptions and API revenue for developers (the majority of its revenue), compute costs to train and run models use more than the total amount of money generated from consumer subscriptions.

To alleviate this pressure, OpenAI in early 2026 declared a major strategic shift. The company started experimenting with ads in ChatGPT back in February 2026, despite CEO Sam Altman's recent declaration that “advertising is a last resort” business model back in October 2024.

The Road to an IPO

Reuters has reported that OpenAI is planning an IPO that will value the company at $1 trillion, about double its current private valuation. The listing would put the company under a microscope like never before.

The total losses are estimated to be in the range of $44 billion in the coming five years, or between 2023 and 2028, based on internal financial statements leaked in Microsoft's SEC filings. Meanwhile, Sam Altman has insisted that the revenues will hit $100 billion by 2027, a number greeted with guarded scepticism by financial pundits.

The key, unanswered question for OpenAI is whether investors will be as patient with the company's capital markets as they have been with its private investors.