Cracks Are Forming. OpenAI to Lose $14 Billion This Year

One of the major generative AI companies, OpenAI, is forecasting a loss of $14 billion for 2026.

Earlier this week, I published an article talking about how generative AI products are not getting the public buy in that companies need to justify the enormous investments that have been bandied about. As a result, companies have been growing increasingly desperate as they actually begin to struggle to give AI products away for free.

With the investment dollars being a giant financial circle jerk, there has been a growing consensus among reasonable observers that AI is in a giant financial bubble. The efforts to cram AI into virtually everything in a desperate effort to get people to use it are all signs that companies are under considerable pressure to show the outside investors that there is going to be a return on investment despite years of not delivering. This only adds further evidence that we are in a giant financial bubble and the question is less if the bubble is going to burst, but when.

Recently, there was an interesting story that surfaced that suggests that OpenAI has internally admitted that they are going to be racking up huge losses thanks to the investment dollars drying up. From Yahoo! News:

Internal OpenAI documents predict the AI specialist is set to bleed fully $14 billion in losses for 2026 according to a new report. It’s also claimed that OpenAI will continue to make huge losses totalling $44 billion until 2029, when it won’t just turn a profit, but will by then be generating Nvidia-style revenues.

A new report from The Information claims to have seen internal OpenAI documents setting out various financial performance projections. That $14 billion loss for 2026 is said to be roughly three times worse than early estimates for 2025.

Over the 2023 through end of 2028 period, the report claims OpenAI expects to lose $44 billion, before turning a profit of $14 billion in 2029. Somewhat incongruously, The Information also says that OpenAI’s cash burn is not as bad as previously thought, with the company tearing through a mere $340 million in the first half of the most recent financial year. How that squares with overall losses counted in multiple billions isn’t explained.

The report further claims that OpenAI plans to spend an astonishing $200 billion through the end of the decade, 60% to 80% of which will be spent on training and running AI models.

This is not a sign that we are entering into a new industrial revolution with companies set to skyrocket in value to levels not seen before in human history. This is a sign that the cracks are forming with these AI companies. The buy in that these companies were projecting were always unrealistic and the only thing really fuelling these companies are investors who got hooked on pie in the sky promises and wild claims. The reality is that public buy in is nowhere near what was promised and the technology was never as sophisticated as some were claiming (re: sentience).

Now, whether or not this is a temporary setback remain to be seen. We’ve seen the industry show signs of faltering only to turn up the hype fire hose to shore up the losses. Luckily, for them, they have a complicit and gullible mainstream media who would have no problem simply amplifying their bullshit claims without questioning it. The thing is, reality always finds a way and these losses do suggest that reality is finally making inroads in breaking through.

Drew Wilson on Mastodon, Twitter and Facebook.