Is OpenAI Going Bankrupt?

By Sebastián Alburquerque – 1tth grade

OpenAI, the maker of ChatGPT, has been called one of the most famous AI labs in the world. Its technology powers many popular apps and services. But behind the scenes, OpenAI is burning through huge amounts of money to keep up with cutting-edge research. Recent reports warn that OpenAI may lose $14 billion in 2026 and could run out of cash by mid-2027 unless it raises new funding. These shocking projections come from internal documents and expert analysis, and they have set off alarm bells in the tech and finance communities.

According to an industry report, internal forecasts show OpenAI is projected to lose $14 billion in 2026. The same report suggests total losses of $44 billion from 2023 through 2028 before turning a small profit in 2029. In practical terms, that means OpenAI could lose many times more than it earns for several years. For comparison, one analysis notes the company was on track to “burn through $8 billion in 2025, rising to $40 billion in 2028”. Even conservative estimates see billions of dollars in losses looming. For example, a U.S. Senate letter reported OpenAI lost $13.5 billion in just the first half of 2025. In reply, OpenAI’s CFO said the firm did about $20 billion in revenue in 2025. But spending is growing even faster than sales.

Why is OpenAI spending so much? The answer is shown in its infrastructure and research costs. Training huge AI models and running data centers is extremely expensive. OpenAI has signed massive deals with partners to buy computing power and cloud services. For example, it agreed to buy about $250 billion of Microsoft’s cloud services and at least $100 billion of Nvidia computing over the next few years. In total, OpenAI is said to have committed $1.4 trillion in spending through the end of the decade. Much of this will go into servers, chips, and data centers. These investments aim to build up capacity for future AI breakthroughs, but they also mean huge cash outflows now.

This “spend now, profit later” strategy worries many analysts. Economist Sebastian Mallaby, who has followed OpenAI closely, recently warned that “over the next 18 months, OpenAI runs out of money.” He argues that unlike tech giants (which have existing businesses to pay the bills), OpenAI has no big legacy revenue. It relies mostly on future promises and funding rounds. Investors have taken note: when Microsoft (OpenAI’s top backer) reported its latest results, its stock plunged and $440 billion in market value vanished. Commentators said Wall Street fears Microsoft’s deep bets on OpenAI are backfiring. As one report put it, OpenAI has become a “notoriously vast cash-burning machine” that will need “tens of billions” more in investment to stay alive. In short, many money managers are skeptical that OpenAI will quickly turn this massive spending into profit.

What would happen if OpenAI did go bankrupt? The impact could be huge. OpenAI’s services (like ChatGPT and its underlying models) are used by millions of people and thousands of businesses worldwide. If the company failed, those products might suddenly disappear or become unstable. Companies that built products on OpenAI’s technology would scramble to find alternatives. The sudden loss of OpenAI could slow innovation in many areas that rely on large language models. There’s also a knock-on effect: OpenAI is deeply tied to Microsoft. Microsoft has invested billions of dollars and even carries a backlog of hundreds of billions for OpenAI-related projects. If OpenAI collapsed, Microsoft would face a huge hole in its cloud strategy and might have to either bail out or rewrite its AI plans entirely.

Some industry experts have even wondered if OpenAI has become “too big to fail.” The U.S. Senate has taken notice: Senator Elizabeth Warren wrote a letter citing reports that OpenAI’s spending and complex financing “may have created systemic risk to the U.S. economy.”. In other words, lawmakers are alarmed at how intertwined OpenAI is with major tech and national AI goals. A collapse might trigger calls for government support or cause broader market turmoil. On the flip side, a bankruptcy could prompt big tech companies (like Microsoft, Nvidia, or even Amazon and Google) to scoop up OpenAI’s technology and talent, quickly shifting the AI race to other players. In that sense, the AI industry at large might survive — but the loss of OpenAI’s leadership and open research commitments would certainly reshape the field.

In summary, OpenAI’s situation is a financial juggling act under very intense scrutiny. The company has achieved blockbuster success in AI, but the costs of staying on top are enormous. Reports from multiple sources paint a stark picture: without further funding or a clear path to profitability, OpenAI could burn through its war chest and face bankruptcy by 2027. This would be a major event in tech and finance, potentially altering the future of AI development. For now, OpenAI insists its revenue is growing fast and that new business models (like ads and enterprise deals) will turn the tide. But as financial experts caution, the gap between OpenAI’s spending and earnings is unprecedented. Whether OpenAI can bridge that gap – or find a lifeline before the cash runs out – remains one of the biggest financial dramas in the tech world today.

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