In a recent episode of the Bg2 Pod, which aired on Friday, host Brad Gerstner, the founder of Altimeter Capital, posed a critical question regarding OpenAI's financial future. He inquired how the company could feasibly make financial commitments amounting to $1.4 trillion when its reported annual revenue stands at only $13 billion. In response, Sam Altman, the CEO of OpenAI, confidently stated, “We’re doing well more revenue than that,” hinting at the company’s optimistic financial outlook.
OpenAI has recently secured substantial AI infrastructure deals with prominent companies, including Nvidia, Broadcom, and Oracle. This strategic move comes as other major players in the AI landscape, such as Amazon, Alphabet, Meta, and significant OpenAI investor Microsoft, collectively invest hundreds of billions of dollars annually in capital expenditures. Despite the impressive influx of capital, Altman has cautioned that losses may persist as the company navigates its growth trajectory.
In its latest quarterly results, Microsoft reported a $4 billion charge that suggests OpenAI incurred losses of approximately $12 billion last quarter. This financial context raises questions about OpenAI's sustainability, and the company has yet to respond to inquiries regarding these figures. Nonetheless, during the Bg2 Pod discussion, Altman reiterated his confidence in OpenAI's revenue growth, emphasizing that, “We do plan for revenue to grow steeply. Revenue is growing steeply.”
Altman elaborated on OpenAI's ambitious vision, stating that the company aims not only for the continued growth of ChatGPT but also to establish itself as a significant player in the AI cloud market. He mentioned that the consumer device business will become an essential revenue stream, and that AI's potential to automate scientific processes could yield significant value. Altman expressed a bold sentiment regarding the company’s prospects, wishing for short-sellers to “get burned” if they were to bet against OpenAI's success.
While Altman remains optimistic, he acknowledged that OpenAI is taking considerable risks, particularly in securing adequate computing capacity. He noted that if the company fails to meet its infrastructure needs, it could fall short of revenue forecasts. In a display of solidarity, Microsoft CEO Satya Nadella, who also participated in the podcast, praised OpenAI's business execution, stating that it has surpassed all business plans he has encountered.
As the conversation progressed, Altman hinted at potential explosive revenue growth in the coming years. Reports from last year suggested that OpenAI projected its revenue to reach $100 billion by 2029. During the podcast, Gerstner suggested the possibility of revenue exceeding $100 billion annually by 2028 or 2029, to which Altman playfully interjected, “How about ’27?” This exchange highlights the growing optimism surrounding OpenAI's financial future and its potential trajectory in the rapidly evolving AI sector.
