OpenAI’s Cash Burn Could Approach $280 Billion by 2030

OpenAI has reportedly forecast that it will burn through nearly $280 billion by the end of 2030.

That projection spotlights the artificial intelligence company’s significant long-term funding needs as it targets a valuation of more than $1.2 trillion in new investment talks, the Financial Times (FT) reported Friday (Sept. 18).

The startup expects negative free cash flow of $278 billion between this year to 2030 as it invests heavily to expand its access to computing power, the report added, citing  a recent presentation viewed by the FT.

OpenAI expects its expenses will easily outweigh its revenues, which are forecast to increase by nearly tenfold in the same period, from $36 billion this year to $350 billion in 2030, the report said. In all, the company anticipates booking $840 billion in revenue between now and the close of 2030.

Now, the company is asking investors, many of whom have already given OpenAI tens of billions of dollars, to have faith in its spending plans, the report said. PYMNTS has contacted OpenAI for comment but has not yet gotten a reply.

The company recently began talks for a new funding round, with backers approaching OpenAI to discuss investing at a $1.2 trillion valuation. A source close to the company told the FT OpenAI is campaigning for an even higher valuation.

OpenAI’s ability to address its massive funding needs is critical to a series of financial arrangements and hardware deals the company has made as it seeks to secure scarce computing power, the report said, adding that major tech groups like Nvidia rely heavily on contracts with OpenAI for their revenues.

The company projects it will spend around $856 billion on computing power and infrastructure by the end of 2030, its greatest single expense by far, the report said. OpenAI raised $122 billion in March, and the presentation indicates it is on pace to exhaust that cash in 2028.

OpenAI CEO Sam Altman said earlier this month that the company is unlikely to go public before 2027, calling a listing “ill-advised” amid increasing concerns about AI safety. Those concerns have led AI executives to propose a slowdown in development of the technology.

In a column last week, PYMNTS CEO Karen Webster contends that the warnings about the dangers of AI aren’t in keeping with these companies’ behavior.

“The gap between what these companies say and what they do is the most useful data point in this whole debate,” she wrote. “Either the headlines are overstated, or the plan is nowhere near the size of the problem. Neither is a reason to hand the leaders a slower race, and neither is a reason to write the rules in a panic.”

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