- An economist predicts OpenAI will run out of cash within the next 18 months.
- He argues that the company has made too many commitments without having avenues to generate revenue.
- In contrast, tech giants like Google and Microsoft are reportedly more likely to be able to absorb losses from initial investments in the AI business.
As the AI boom continues and companies move toward investing in data centers and other AI-based infrastructure, OpenAI remains one of the leaders in the industry.
At the same time, the company seems to be admitting defeat after recently confirming the addition of advertisements to the service. Following this announcement, an analyst believes OpenAI will run out of money in the next two years.
Why it matters: OpenAI can be considered the pioneer of modern generative AI implementations, thanks to its work on ChatGPT, which has become the benchmark for other tech giants.
Sebastian Mallaby, an economist at the Council on Foreign Relations, believes that OpenAI has committed to far too many spendings for its own good. In a new story published on the NYTimes, he predicted that the company would run out of cash over the next 18 months.
Mallaby pointed out that the AI giant has already committed to spending over $1 trillion before 2030, an amount it may never be able to raise. It also lost $8 billion in 2025, and this sum is expected to go up to $40 billion by 2028.
According to the economist, the math does not add up for OpenAI. He argues that the initial losses in the AI industry could still be absorbed by a giant like Google or Microsoft due to already present revenue streams and profitable businesses at these companies.
OpenAI, on the other hand, has no way to make up for its current and past losses. Therefore, 2026 is expected to be a make-or-break year for the company regardless of what the future holds.
Even if OpenAI reneges on many of those promises and pays for others with its shares, the company must still find daunting sums of capital. However rich the eventual AI prize, the capital markets seem unlikely to deliver.
-Sebastian Mallaby
The analyst also noted that most users seem unwilling to pay for ChatGPT. In the event that a paid model is enforced upon consumers as a form of revenue generation for OpenAI, they are likely to simply switch to other free alternatives.
Previously, the OpenAI founder noted that ads would serve as the last resort for the company. With ChatGPT officially set to begin incorporating ads into the service, it seems the situation could change for the worse in the coming months.
Thank you! Please share your positive feedback. 🔋
How could we improve this post? Please Help us. 😔
[Senior News Reporter]
Avinash is currently pursuing a Business degree in Australia. For more than 5 years, he has been working as a gaming journalist, utilizing his writing skills and love for gaming to report on the latest updates in the industry. Avinash loves to play action games like Devil May Cry and has also been mentioned on highly regarded websites, such as IGN, GamesRadar, GameRant, Dualshockers, CBR, and Gamespot.
Join Our Community
