October 10, 2024 – According to a report by The Information, OpenAI predicts that it will achieve profitability by 2029, with revenues reaching $100 billion. However, until this point is reached, the company faces significant financial challenges.
Based on an analysis of OpenAI’s financial documents, The Information estimates that the company could incur losses of up to $14 billion by 2026, which is almost triple the expected loss for this year. It’s important to note that this estimation does not include stock-based compensation, one of OpenAI’s largest expenses that is not paid in cash.
Last month, Fortune magazine reported that OpenAI CEO Sam Altman announced during a weekly meeting that the company would be transitioning its complex non-profit structure to a more traditional profit-oriented model next year. This shift involves maintaining a non-profit division while adjusting the overall structure to focus on generating profits.
OpenAI was established as a non-profit organization in 2015 and has primarily relied on donor funds. On its website explaining its structure, OpenAI states that it has only raised a total of $130.5 million in donations over the years. The company points out that this amount is not sufficient to cover the computational power and talent costs required to drive its core research, highlighting the need for alternative funding sources.
