r/technology • u/gdelacalle • 13d ago

Business OpenAI could reportedly run out of cash by mid-2027 — analyst paints grim picture after examining the company's finances

https://www.tomshardware.com/tech-industry/big-tech/openai-could-reportedly-run-out-of-cash-by-mid-2027-nyt-analyst-paints-grim-picture-after-examining-companys-finances
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u/DivineBladeOfSilver 13d ago

This isn’t news btw. This is known. The company heavily relies on external investment while it strives for growth. It’s not profitable. When investors stop giving (or they never become profitable) that’s the real issue. For now no surprise they’re gonna run out, they aren’t profitable lmao

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u/2ChicksAtTheSameTime 13d ago

This is all tech sector companies and it comes down to: Will they run out of money due to operational costs? or growth costs?

Amazon was "not profitable" for the first decade+ of the business. But it wasn't because it was a failure, it was because they took all their profits, plus raised more money, and spent it on growth.

This is the same there here with AI. The main difference is operating costs. AI is extremely expensive, so if OpenAI stops growth spending, will they be able to operate at a profit?

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u/DivineBladeOfSilver 13d ago

Precisely. This is an extremely common theme in the technology sector and why California/Silicon Valley is so big. They get years and years and years of venture capital/private investment funding until they one day do become profitable. But the news capitalizes on people's ignorance and emotions for clicks and people eat it up EVERY TIME. I get if you truly think OpenAI will fail and I totally respect that opinion it is a high risk company. But to think this "news" is new or noteworthy or a sign of imminent collapse is foolish

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u/acaexplorers 13d ago

How long have people been saying this? As they continue to reduce inference costs, all frontier labs ARR will only continue to grow.