When does OpenAI go bankrupt?

One Weird Company

OpenAI is fascinating, if nothing else. The backstory of the company would give Game of Thrones showrunners something to work with. Its history, from a fallout with major donor Elon Musk to the ruthless ousting of CEO Sam Altman (later re-hired), sounds like a company more suitable for HBO's Silicon Valley than for leading the charge into artificial intelligence. What was once a humble non-profit organization exploring concepts in AI is now a global behemoth making dystopian technobabble claims that would make Isaac Asimov wince.

If OpenAI has been successful at one thing, it's selling a dream. The underlying technology enabling tools like ChatGPT is novel, perhaps even revolutionary. But it's OpenAI's ability to convince investors, business leaders, journalists, and the public at large that they are on the verge of transforming the world that makes the company what it is.

And so what is OpenAI, really?

Unless Sam Altman and his crew find a way to turn ChatGPT and OpenAI's other products into a money-making machine, OpenAI could best be described as the world's largest cash incinerator.

Sky-High Capital Investments

OpenAI has received tens of billions of dollars in investments over the years. Since its inception in December 2015, the company has raised a grand total of about $55 to 65 billion in the form of cash and securities through funding rounds. How much is that investment capital worth? A recent secondary sale of shares in October 2025 valued the company at $500 billion.

But OpenAI is also receiving investment in the form of compute. Microsoft in particular is enabling the company to make use of its Azure compute platform for an undisclosed discount, making the true operating costs of OpenAI virtually unknowable to the public.

Furthermore, OpenAI has been soliciting potential investments as well. For example, Nvidia has announced a $100 billion investment over time for data center capacity and equity. That may be a bit circular, since a large fraction of "data center capacity" is buying those $50,000 GPUs made by ... Nvidia.

Eye-watering Spending and Commitments

The investment capital coming into OpenAI is astronomically high, but the spending appears to be even higher.

In an investigative report by Ed Zitron, OpenAI's spending just on inferencing costs seems to be out of control. The total revenue behind OpenAI is not sufficient to service just ChatGPT's consumer portal, to say nothing of the expense of training models, paying employees, and keeping the lights on.

Simple Math for Simple Minds

Out of curiosity, how much longer can OpenAI last given its current financial situation? If we tally up all of OpenAI's current expenditures and compare it to how much cash they have on hand, when can we expect their reserves to finally be depleted?

With the assumption OpenAI has about $60 billion in cash on hand (it's impossible to know for sure), and a current burn rate of $9 billion per year, the company could plausibly sustain itself for another 6.5 years.

But this calculation is nonsense.

OpenAI has been and will continue to be extremely active in scrounging up more investors, more lenders, and more revenue. Banks will lend money, investors will purchase equity, and the company will find ways to charge customers more money. The company will also find ways to cut costs. The introduction of the router system to automatically select the "best" model for a particular query could significantly reduce compute spend if configured to aggressively favor the smaller, cheaper models.