Unprecedented "burn rate"! Wall Street estimates: Before turning profitable, OpenAI will have accumulated losses of $140 billion.

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As the leader of the artificial intelligence wave, OpenAI is facing a grim reality: before reaching profitability, it may have to endure an astonishing loss of over $140 billion.

The latest developments have heightened market caution. Recently, Deutsche Bank cited a forecast disclosed by OpenAI to investors, showing that by 2029, its cumulative negative free cash flow is expected to reach $143 billion. This figure stems from its nearly endless demand for computing resources, with related expenditures projected to far exceed its revenue growth.

Meanwhile, concerns over its growth potential are also intensifying. Data shows that since May this year, OpenAI’s subscription user growth in major European markets has “more or less stalled.” This suggests that the initial explosive growth phase following the launch of ChatGPT may have ended, and future user acquisition will face greater challenges.

Staggering Loss Projections

Deutsche Bank strategist Jim Reid states that OpenAI’s financial outlook is full of challenges. The forecast presented to investors shows that from 2024 to 2029, the company is expected to generate $345 billion in revenue, but during the same period, expenditures are estimated to reach $488 billion, mainly for computing power costs.

This means that during this period, OpenAI’s cumulative negative free cash flow will reach $143 billion. This projection does not even include the recently rumored $1.4 trillion data center investment commitment.

Previously, HSBC also forecasted that by 2030, OpenAI’s cash burn could exceed $210 billion. This massive capital gap echoes the view of IBM CEO Arvind Krishna, who predicted that, under current cost-efficiency calculations, investing trillions of dollars in data centers could never become a profitable business.

Unprecedented “Burn Rate” Scale

To better understand OpenAI's position, Jim Reid compared its expected losses with the cumulative losses of other startups before they reached profitability. The report states that both OpenAI’s projected “burn rate” and competitor Anthropic’s expected losses far surpass historical records.

The report emphasizes that the loss incurred during a startup’s development phase should be differentiated from the massive annual losses of mature companies during crises. For example, AOL Time Warner reported a $99 billion annual loss in 2002, and American International Group (AIG) suffered a similar scale of loss in 2008.

But these were mature companies with long-term profitability records, encountering major difficulties. In contrast, as a startup, OpenAI’s expected cumulative loss is unprecedented.

Signs of Slowing Growth

Aside from the staggering costs, OpenAI’s growth momentum is also showing signs of slowing. On the third anniversary of ChatGPT’s launch, another Deutsche Bank analyst, Adrian Cox, issued a report outlining the challenges faced by the company, including subscriptions, alternatives, and high costs.

The report cites transaction data from dbDataInsights (dbDIG), showing that OpenAI’s subscription user growth in major European markets has essentially stagnated since May this year. This updated data indicates that the earlier observed slowing growth is not an anomaly, but may become a trend. For a company that relies on user growth to support its high valuation and huge expenditures, this is undoubtedly a warning sign.

Although OpenAI may continue to attract large sums of funding and may eventually develop revolutionary products that generate considerable profits, for now, no other startup in history has operated under such enormous expected losses. The market is closely watching how this AI giant will find a path to profitability in this “uncharted territory.”

Risk Warning and DisclaimerThe market has risks; investment must be prudent. This article does not constitute personal investment advice and does not take into account individual users’ special investment objectives, financial circumstances, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their specific situation. Investing based on this is at one’s own risk. ```