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OpenAI expects its revenue to increase from $36 billion in 2026 to $350 billion in 2030 and expects to book a total of $840 billion in revenue between now and the end of the decade, according to the presentation, which the company presumably sent to its current and potential investors ahead of its expected IPO. OpenAI plans to spend about $856 billion on computing resources and infrastructure over the same period, its largest expense.
The company also intends to spend an additional $262 billion on other things during the period. As a result, OpenAI forecasts cumulative negative free cash flow of $278 billion from 2026 through 2030. While the sum is massive, this represents an improvement from a projection made in May, when the company expected cumulative negative free cash flow of $305 billion, FT notes.
Financing OpenAI's continuous expansions requires huge amounts of additional capital. OpenAI raised $122 billion in March, but its current financial model indicates that this money could be depleted in 2028, FT reports. The company, recently valued at $852 billion, has already entered discussions about another large investment round. Prospective investors have approached OpenAI about providing capital at a valuation of $1.2 trillion, while a person close to the company said OpenAI is seeking an even higher valuation.
The spending reflects the gargantuan cost of building AI data centers and additional infrastructure to train new AI models and then use them to provide services to clients. Meanwhile, it means OpenAI's revenue growth will lag its spending so much that it will burn $278 billion in four years. To put it into context, $278 billion is only slightly below the Austrian government's $286 billion spending in 2024 and exceeds the annual government expenditures of Indonesia and Norway, at least according to the IMF.
Big tech spends more than $1 trillion on AI infrastructure
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/artificial-intelligence/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/artificial-intelligence/openai-projections-point-to-a-massive-usd278-billion-cash-burn-through-2030-that-exceeds-the-national-budgets-of-indonesia-and-norway-usd856-billion-compute-tab-outpaces-tenfold-revenue-surge#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.