OpenAI's $115B Cash Burn

OpenAI has significantly increased its projected cash burn to $115 billion through 2029, a substantial rise from previous estimates. This surge in expenditure is primarily driven by the escalating costs associated with AI development, particularly the computing infrastructure and data centres required to support its advanced AI models like ChatGPT. To mitigate these expenses, OpenAI plans to develop its own data centre server chips and facilities.

Despite the heavy spending, OpenAI anticipates strong revenue growth, projecting $12 billion in 2025 and potentially exceeding $100 billion by 2029. ChatGPT is expected to be a key revenue driver, contributing significantly to these figures. However, profitability is not expected until at least 2029. The company's investment in AI infrastructure is seen as crucial for maintaining a competitive edge against rivals also investing heavily in the field.

OpenAI's revised financial outlook reflects the immense capital required to stay at the forefront of the rapidly evolving AI landscape. The company is also collaborating with Broadcom to produce its first set of chips, which it intends to use internally. This strategic move aims to control operational costs and reduce reliance on external cloud providers.