OpenAI revises cash burn projection to $115 billion by 2029

OpenAI has sharply raised its projected cash burn through 2029 to $115 billion, according to The Information. This marks an $80 billion increase from previous estimates, as the company ramps up spending to fuel the AI behind its ChatGPT chatbot.

The company, which has become one of the world’s biggest renters of cloud servers, projects it will burn more than $8 billion this year, about $1.5 billion higher than its earlier forecast. The surge in spending comes as OpenAI seeks to maintain its lead in the rapidly growing artificial intelligence market.

To control these soaring costs, OpenAI plans to develop its own data center server chips and facilities to power its technology.

The company is partnering with U.S. semiconductor giant Broadcom to produce its first AI chip, which will be used internally rather than made available to customers, as reported by The Information.

In addition to this initiative, OpenAI has expanded its partnership with Oracle, committing to a 4.5-gigawatt data center capacity to support its growing operations.

This is part of OpenAI’s larger plan, the Stargate initiative, which includes a $500 billion investment and is also supported by Japan’s SoftBank Group. Google Cloud has also joined the group of suppliers supporting OpenAI’s infrastructure.

OpenAI’s projected cash burn will more than double in 2024, reaching over $17 billion. It will continue to rise, with estimates of $35 billion in 2027 and $45 billion in 2028, according to The Information.

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