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OpenAI sees roughly $5 billion loss this year on $3.7 billion in revenue
webCredibility Rating
3/5
Good(3)Good quality. Reputable source with community review or editorial standards, but less rigorous than peer-reviewed venues.
Rating inherited from publication venue: CNBC
Relevant for understanding the economic pressures shaping frontier AI lab behavior, funding strategies, and potential trade-offs between safety investment and competitive pressures in the AI industry.
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Importance: 42/100news articlenews
Summary
A 2024 CNBC report reveals OpenAI is projected to lose approximately $5 billion in 2024 despite generating $3.7 billion in revenue, highlighting the massive compute and operational costs involved in frontier AI development. The figures underscore the capital-intensive nature of leading AI labs and raise questions about long-term financial sustainability.
Key Points
- •OpenAI projected a ~$5B net loss in 2024 against $3.7B in revenue, indicating operating costs roughly double incoming revenue.
- •The losses are largely driven by enormous compute infrastructure costs required to train and run frontier AI models.
- •These financials contextualize OpenAI's push to raise billions in new funding and transition toward a more commercial corporate structure.
- •The scale of losses illustrates the competitive dynamics where well-capitalized labs can sustain large deficits to maintain frontier capabilities.
- •Financial pressures may influence safety investment prioritization, deployment timelines, and governance decisions at leading AI labs.
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| OpenAI | Organization | 62.0 |
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Key Points CNBC has confirmed that OpenAI expects about $5 billion in losses on $3.7 billion in revenue this year — figures first reported by The New York Times.
Revenue is expected to jump to $11.6 billion next year, a source with knowledge of the matter confirmed.
OpenAI, which is backed by Microsoft, is currently pursuing a funding round that would value the company at more than $150 billion.
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Follow your favorite stocks CREATE FREE ACCOUNT Sam Altman, CEO of OpenAI, at the Hope Global Forums annual meeting in Atlanta on Dec. 11, 2023. Dustin Chambers | Bloomberg | Getty Images OpenAI, the creator of ChatGPT, expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC has confirmed.
The company generated $300 million in revenue last month, up 1,700% since the beginning of last year, and expects to bring in $11.6 billion in sales next year, according to a person close to OpenAI who asked not to be named because the numbers are confidential.
The New York Times was first to report on OpenAI's financials earlier on Friday after viewing company documents. CNBC hasn't seen the financials.
OpenAI, which is backed by Microsoft , is currently pursuing a funding round that would value the company at more than $150 billion, people familiar with the matter have told CNBC. Thrive Capital is leading the round and plans to invest $1 billion, with Tiger Global planning to join as well.
OpenAI CFO Sarah Friar told investors in an email Thursday that the funding round is oversubscribed and will close by next week. Her note followed a number of key departures , most notably technology chief Mira Murati, who announced the previous day that she was leaving OpenAI after six and a half years.
Also this week, news surfaced that OpenAI's board is considering plans to restructure the firm to a for-profit business. The company will retain its nonprofit segment as a separate entity, a person familiar with the matter told CNBC. The structure would be more straightforward for investors and make it easier for OpenAI employees to realize liquidity, the source said.
OpenAI's services have exploded in popularity since the company launched ChatGPT in late 2022. The company sells subscriptions to various tools and licenses its GPT family of large language models, which are powering much of the generative AI boom. Running those models requires a massive investment in Nvidia's graphics processing units.
The Times, citing an analysis by a financial professional who reviewed OpenAI's documents, reported that the roughly $5 billion in loses this year are tied to costs for running its services as well as employee salaries and office rent. The costs don't include equity-based compensation, "among several large expens
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