Unprecedented "burning money"! Wall Street estimates: Before turning a profit, OpenAI will accumulate losses of $140 billion

As a leader in the wave of artificial intelligence, OpenAI is facing a harsh reality: it may need to endure an astonishing loss of over $140 billion before achieving profitability. Recent developments have intensified market caution. Recently, Deutsche Bank cited a forecast disclosed by OpenAI to investors, indicating that its cumulative negative free cash flow is expected to reach $143 billion by 2029. This figure stems from its nearly endless demand for computing resources, with related expenditures expected to far exceed its revenue growth. Meanwhile, concerns about its growth potential are also escalating. Data shows that since May of this year, OpenAI's subscription user growth in major European markets has "more or less stagnated." This suggests that the initial explosive growth phase following the release of ChatGPT may have ended, and future user acquisition will face greater challenges. Staggering Loss Forecast Deutsche Bank strategist Jim Reid stated that OpenAI's financial outlook is fraught with challenges. The forecast presented to investors shows that between 2024 and 2029, the company is expected to generate $345 billion in revenue, but expenditures during the same period are expected to reach as high as $488 billion, primarily for computing costs. This means that during this period, OpenAI's cumulative negative free cash flow will reach $143 billion. This forecast does not even include the recently reported commitment of up to $1.4 trillion for data center investments. Previously, HSBC also predicted that by 2030, OpenAI's cash consumption could exceed $210 billion. This enormous funding gap echoes the views of IBM CEO Arvind Krishna, who predicted that under current cost-benefit calculations, investing trillions of dollars in capital expenditures for data centers will never become a profitable business. Unprecedented Scale of "Burning Money" To better understand OpenAI's situation, Jim Reid compared its expected losses with the cumulative losses of other startups before profitability throughout history. The report noted that OpenAI's anticipated "burn rate," as well as the expected losses of its competitor Anthropic, far exceed historical records. The report emphasized the need to distinguish between the developmental period losses of startups and the massive annual losses of mature companies during crises. For example, AOL Time Warner reported an annual loss of $99 billion in 2002, and American International Group (AIG) suffered similar-scale losses in 2008 However, these are all mature companies that have encountered significant difficulties after having a long-term profit record. In contrast, OpenAI, as a startup, is facing an unprecedented scale of expected cumulative losses. Signs of Slowing Growth In addition to astonishing costs, OpenAI's growth momentum has also shown signs of slowing down. On the third anniversary of the release of ChatGPT, another analyst from Deutsche Bank, Adrian Cox, published a report revealing the challenges the company faces, including subscriptions, alternatives, and high costs. The report cited trading data from dbDataInsights (dbDIG), showing that OpenAI's subscription user growth in major European markets has essentially plateaued since May of this year. This updated data indicates that the previously observed slowdown in growth is not an anomaly but may become a trend. This is undoubtedly a warning sign for a company that relies on user growth to support its high valuation and substantial expenses. Although OpenAI may continue to attract significant funding and eventually develop revolutionary products capable of generating substantial profits, historically, no startup has operated under such enormous expected losses. The market is closely watching how this AI giant will find its path to profitability in this "unknown territory."