OpenAI could lose up to $44 billion

According to information from The Information, OpenAI is noted to have a rapidly growing revenue, which could reach 100 billion USD by 2029, but before that, in the period 2023-2028, the company could lose up to 44 billion USD.

OpenAI could lose up to $44 billion

Accordingly, OpenAI reported a loss of $340 million in the first half of 2024 and the company revealed that it would not be profitable until 2029.

OpenAI was recently valued at $157 billion after successfully raising $6.6 billion.

The Information revealed that the most worrying thing is that OpenAI requires investors to exclude billions of dollars spent on training AI models (this is one of OpenAI's main activities and has launched GPT-4 as well as the recent GPT-o1 model).

An AI company cannot exclude the cost of training its AI models—a basic business expense—when reporting its earnings, a venture capitalist said. For an AI company like OpenAI, training AI is an ongoing and never-ending process.

Investors expect OpenAI to go public in the coming years, but the Securities and Exchange Commission focuses heavily on measuring profits and doesn't allow for many business expenses to be deducted.

The venture capitalist also noted that OpenAI’s other costs could decline in the coming years, which could help it reduce its losses. However, the cost of training AI models cannot be ruled out, and this is a large, ongoing cost to provide the service.

OpenAI isn’t the first company to ask investors to ignore core operating costs. Groupon, the group-buying leader, and WeWork have done the same.

Accordingly, before its 2011 IPO, the company asked investors to consider excluding some costs related to marketing.

In 2019, the company again asked investors to focus on “community-adjusted EBITDA.” Essentially, the company wanted investors to ignore the costs of running its business.

OpenAI is doing the same thing. However, this will come to an end if they prepare a prospectus for an IPO.

Source: https://kinhtedothi.vn/openai-co-the-lo-toi-44-ty-usd.html