Soundtrack: Queens of the Stone Age - Song For The Dead
Editor’s Note: The original piece had a mathematical error around burnrate, it’s been fixed.
A few days ago, Sam Altman said that OpenAI’s revenues were “well more” than $13bn in 2025, a statement I question based on the fact, based on other outlets’ reporting, OpenAI only made $4.3bn through the first half of 2025, and likely around a billion a month, which I estimate means the company made around $8bn by the end of September.
This is an estimate. If I receive information to the contrary, I’ll report it.
Nevertheless, OpenAI is also burning a lot of money. In recent public disclosures (as reported by The Register), Microsoft noted that it had funding commitments to OpenAI of $13bn, of which $11.6bn had been funded by September 30 2025.
These disclosures also revealed that OpenAI lost $12bn in the last quarter — Microsoft’s Fiscal Year Q1 2026, representing July through September 2025. To be clear, this is actual, real accounting, rather than the figures leaked to reporters. It’s not that leaks are necessarily a problem — it’s just that anything appearing on any kind of SEC filing generally has to pass a very, very high bar.
There is absolutely nothing about these numbers that suggests that OpenAI is “profitable on inference” as Sam Altman told a group of reporters at a dinner in the middle of August.
Let me get specific.
The Information reported that through the first half of 2025, OpenAI spent $6.7bn on research and development, “which likely include[s] servers to develop new artificial intelligence.” The common refrain here is that OpenAI “is spending so much on training that it’s eating the rest of its margins,” but if that were the case here, it would mean that OpenAI spent the equivalent of six months’ training in the space of three.
I think the more likely answer is that OpenAI is spending massive amounts of money on staff, sales and marketing ($2bn alone in the first half of the year), real estate, lobbying, data, and, of course, inference.
According to The Information, OpenAI had $9.6bn in cash at the end of June 2025.
Assuming that OpenAI lost $12bn at the end of calendar year Q3 2025, and made — I’m being generous — around $3.3bn (or $1.1bn a month) within that quarter, this would suggest OpenAI’s operations cost them over $15bn in the space of three months. Where, exactly, is this money going? And how do the numbers published actually make sense when you reconcile them with Microsoft’s disclosures?
In the space of three months, OpenAI’s costs — if we are to believe what was leaked to The Information (and, to be clear, I respect their reporting) — went from a net loss of $13.5bn in six months to, I assume, a net loss of $12bn in three months.
Though there are likely losses related to stock-based compensation, this only represented a cost of $2.5bn in the first half of 2025. The Information also reported that OpenAI “spent more than $2.5 billion on its cost of revenue,” suggesting inference costs of…around that?
I don’t know. I really don’t know.
But what I do know is that Sam Altman has made obscene, ridiculous promises to seemingly every company in the tech industry. He promised $38bn over seven years to Amazon Web Services (starting immediately), $300bn to Oracle over five years (starting in 2027), $22.4bn to CoreWeave over five years (started October 2025), and pledged that OpenAI will spend $250bn on Microsoft Azure, which I assume wraps in the already-reported $28bn it will spend on Azure in 2028.
Based on these calculations, and OpenAI’s already-reported costs, I calculate that by 2027, OpenAI will be spending over $11bn a month on compute costs alone.
Or, perhaps more. Last night, in a lengthy thread that was roundly mocked for its defensive tone and Dostoyevskian wordcount, Sam Altman said that OpenAI is “looking at [compute] commitments of about $1.4 trillion over the next 8 years.” Now, note the non-committal language there (“looking at”), but if we assume that it goes through with all of these, we’re looking at an average monthly spend of $14.58bn ($1.4tn divided by 96 months).
For some context, Meta’s last quarterly (not monthly) operating expenses were $30bn — up from $27bn in the previous quarter — which works out to around $10bn a month for a company that regularly makes more than $15bn a quarter in net income (on revenues of over $51bn, though its latest quarter involved a $15bn or so hit to net income due to tariffs).
Similarly, Microsoft had operating expenses of $39bn in its last quarter — around $13bn a month — on net income of over $27bn (and revenues of over $77bn).
For some context, Meta has over 78,000 employees, and Microsoft over 200,000. In August, The Verge reported that OpenAI had “roughly 3,000 employees.”
The Information reported that OpenAI would make $100bn in revenue in 2028 — what a joke! — with a cash burn of $47bn. Based on the publicly-announced deals alone, assuming that it hits $100bn of revenue that year (it won’t), OpenAI will burn $39bn just on the above compute costs, which do not include the cloud deal with Google, because we have no idea how much that actually costs.
Sidenote: In an interview with Brad Gerstner, a visibly-annoyed Altman hinted that OpenAI would hit $100bn in revenue by 2027. If the time-link in that video doesn’t work, skip to 22:50.
These costs also run directly contrary to previous reports that OpenAI would spend $111bn a year on compute by 2028, somehow decreasing to $108bn by 2029, and $105bn by 2030. Based on my estimates, it appears that by 2028, OpenAI will spend at least $139bn on compute, and those costs will escalate over time.
If we are to believe the leaks, OpenAI claims it will make $200bn in revenue in 2030, on compute costs of, based on other leaks, $105bn.
While I cannot speak to anybody’s sourcing, I am also calling into question the financial health and stability of OpenAI.
Today, I’m going to present a case: that the numbers — both those reported by the company and stated through reporting — do not make sense based on the disclosure of these $12bn in losses, nor do they make sense when you put them next to each other with the dates they were leaked.
I also am calling into question Sam Altman’s statement about the company doing “well more” than $13bn in revenue. Based on my own analysis of reported numbers, OpenAI, outside of incredible, unforeseen revenue growth, will fail to reach its projected revenue of $13bn for the year, let alone “well more” than it.
Worse still, based on a deep analysis of every single mention of OpenAI’s revenues, costs, cloud compute deals, and funding rounds, it appears that the company burned at least $19bn in cash from 2023 through H1 2025 (out of $28.6bn in funding and revenues). Confusingly, revenue burn only comes in at $13.7 billion in cash - which should leave OpenAI with at least $14.9 billion in cash at the end of 1H 2025, not $9.6 billion. There’s a $4.1 billion gap.
It’s just a gut feeling, but I believe that gap has a culprit: OpenAI’s inference spend, which I believe may be higher than has previously been reported based on my analysis. I cannot find a tangible reason for the shortfall.
In simpler terms, OpenAI’s numbers don’t make sense.
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