Unprecedented "Cash Burn": Wall Street Estimates OpenAI Could Accumulate $140 Billion Losses Before Turning Profitable

As a leader in the AI revolution, OpenAI faces a stark reality: it may endure staggering losses exceeding $140 billion before achieving profitability.

Recent developments have heightened market caution. Deutsche Bank cited OpenAI’s investor disclosures, projecting cumulative negative free cash flow of $143 billion by 2029. This stems from its insatiable demand for computing resources, with expenses expected to far outpace revenue growth.

Simultaneously, concerns over growth prospects are mounting. Data reveals that since May, OpenAI’s subscription growth in key European markets has "more or less stalled," signaling the end of ChatGPT’s initial explosive growth phase and tougher user acquisition ahead.

**Staggering Loss Projections** Deutsche Bank strategist Jim Reid noted OpenAI’s challenging financial outlook. The company’s forecasts project $345 billion in revenue from 2024 to 2029 but $488 billion in expenses—primarily computing costs—resulting in $143 billion in negative free cash flow. This excludes recent reports of a potential $1.4 trillion data center investment.

HSBC previously estimated OpenAI’s cash burn could surpass $210 billion by 2030. Such a funding gap aligns with IBM CEO Arvind Krishna’s warning that trillion-dollar data center investments may never yield profits under current cost structures.

**Unmatched "Cash Burn" Scale** Reid compared OpenAI’s projected losses to pre-profit losses of other startups. Both OpenAI and rival Anthropic’s anticipated burn rates dwarf historical precedents.

The report distinguishes startup development losses from mature firms’ crisis-era losses, like American International Group Inc’s (AIG) $99 billion loss in 2008 or AOL Time Warner’s $99 billion hit in 2002. Unlike these established companies, OpenAI’s projected losses as a startup are unprecedented.

**Growth Slowdown Signs** Beyond costs, OpenAI’s growth momentum is cooling. Deutsche Bank analyst Adrian Cox highlighted challenges in subscriptions, competition, and high expenses. Transaction data from dbDIG shows flat subscription growth in Europe since May, suggesting a sustained trend—a red flag for a firm reliant on user growth to justify valuation and spending.

While OpenAI may secure funding and eventually launch profitable breakthroughs, no startup has operated under such colossal projected losses. Markets are watching closely as this AI giant navigates uncharted territory toward profitability.