OpenAI Is In A Far Worse Position Than Anyone Thought It Was
This is damning.
Everyone with even a modicum of sense has been predicting OpenAI’s self-inflicted demise for a while now. It is painfully obvious that this is not a sustainable business. Their product is insanely expensive and has basically no economies of scale, and while it might be impressive to a specific breed of narcissists and sycophants, it simply doesn’t bring in enough cash to cover its ludicrous operational costs. OpenAI is more akin to a cash-hungry black hole than a sustainable business. Many, including myself, have predicted that it will go bankrupt soon (read more here). But it turns out OpenAI’s ship is sinking significantly faster than even the most pessimistic predicted. Let me explain.
This revelation comes from Ed Zitron, who received an exclusive look at OpenAI’s IPO filings, which detailed the company’s actual balance sheet for 2024 and 2025. But before we dive into this information, to truly wrap our heads around the news, we need some context. Currently, OpenAI is a private company, which means that we don’t have a clear view of its financials. So, analysts have had to estimate its balance sheets based on Sam Altman’s breadcrumb clues. Would you like to hear people’s predictions for OpenAI’s 2025 financials?
On the very optimistic end, one external report predicted that OpenAI would post a net loss of $8 billion in 2025. That is a major escalation from 2024, in which they posted a $5 billion loss and had to effectively be bailed out by their corporate backers. I cannot emphasise this point enough, but an $8 billion loss would still be horrific news for OpenAI, as it proves their losses grow as they scale, not shrink. That heavily implies that, no matter how much they grow, they will always burn cash.
On the more realistic end, others predicted 2025 would be significantly worse for Altman. Take my previous article, in which I used analysis from The Information, which predicted that OpenAI would have operating costs of $28 billion in 2025 and a grounded estimate of $11.9 billion in revenue for the year, resulting in an estimated net loss of $15.6 billion. That is nearly double the previous prediction. This is actually higher than some predictions for their 2026 net loss ($14 billion), and these predictions also maintained OpenAI would go bankrupt by 2027. That should give you an idea of the horrific consequences involved in such a colossal loss.
However, other estimates painted a much more grim outlook. I covered The Information’s reporting on OpenAI’s 2025 H1 financials in my previous article. In the first half of 2025, OpenAI reportedly generated $4.3 billion in revenue while incurring $17.8 billion in operating costs, resulting in a net loss of $13.5 billion. That meant OpenAI was losing about three times more money than it was earning and was on track to post a net loss of roughly $27 billion by the end of the year.
