OpenAI, a global leader in artificial intelligence (AI), expects revenue this year to be US$3.7 billion and a loss of approximately US$5 billion. According to financial documents seen by the media, OpenAI's monthly revenue reached US$300 million in August, a 1,700% increase since the beginning of 2023, and the company expects annual sales this year to be approximately US$3.7 billion. OpenAI expects its revenue to surge to $11.6 billion next year.
But after covering costs related to operating services and other expenses such as employee salaries and office rent, the company expects to lose about $5 billion this year, according to an analysis by a financial professional who reviewed the documents. The figures do not include equity-based compensation paid to employees, as well as several large expenses that were not fully explained in the filing.
These data show that as one of the fastest-rising start-ups in history, behind OpenAI’s extraordinary achievements are also the challenges of soaring operating costs.
financial details
The documents provide the first detailed look at OpenAI's financial health and how it presents itself to investors, but they don't clearly explain how much money it's losing. OpenAI declined to comment on the documents. Documents show that OpenAI’s revenue more than tripled in August compared with the same period last year.
Additionally, as of June, approximately 350 million people were using its services each month, up from approximately 100 million in March. Most of the traffic comes from ChatGPT. Documents show that ChatGPT saw a surge in users after it started allowing people to use the service without creating an account or logging in.
OpenAI expects ChatGPT to bring in $2.7 billion in revenue this year, up from $700 million in 2023, with $1 billion of that coming from other businesses using its technology.
The documents also show that approximately 10 million ChatGPT users pay the company a monthly subscription fee of $20. OpenAI expects to increase the price by $2 by the end of this year and significantly increase it to $44 within the next five years, the document said. More than 1 million third-party developers use OpenAI's technology to power their own services.
OpenAI expects its revenue to reach $100 billion in 2029, roughly equivalent to the current annual sales of Nestle or Target, the second-largest U.S. retailer.
Continue to "burn money"
The filing also suggests that OpenAI will need to continue raising capital over the next year as its operating expenses increase as the number of people using its products increases. People familiar with the matter previously revealed that OpenAI is in talks to raise $6.5 billion from investors at a company valuation of $150 billion.
According to previous media reports, this round of financing will be led by Thrive Capital. In addition, Microsoft, the company's largest investor, will also participate. Apple and Nvidia have also been in talks about investment. It was previously reported that Nvidia intends to invest US$100 million in a new round of financing for OpenAI.
OpenAI Chief Financial Officer Sarah Friar told investors on Thursday that the funding round has been oversubscribed and will close next week.
Her remarks follow the departure of a number of key figures at OpenAI, the most notable of which was chief technology officer Mira Murat's departure this week. It is understood that she has worked at OpenAI for six and a half years, and Murat briefly took over as interim CEO last year. At that time, Altman was quickly reinstated and she returned to her position as chief technology officer.
Also this week, sources revealed that OpenAI is developing a plan to reorganize its core business into a for-profit company that will no longer be controlled by its nonprofit board of directors. The nonprofit corporation will continue to exist and own a minority stake in the for-profit corporation. For the first time, Sam Altman will take an equity stake in a for-profit company. The company could be worth $150 billion after the restructuring.
The source said this structure is more straightforward for investors and makes it easier for OpenAI employees to cash out.