OpenAI's $74 Billion Loss Trajectory Contrasts Sharply with Anthropic's Path to Profitability

OpenAI has spent $12B on inference with Microsoft: Report

Microsoft internal financials also suggest AI flag bearer is nowhere close to $13 billion in revenues OpenAI may be burning far more capital serving its GPT-family of models than previously thought. Leaked documents show the company paying more than $12 billion to Microsoft for compute power since 2024 and suggest much weaker revenue than it needs to pay for all those expenses. According to internal Microsoft financial documents obtained by AI skeptic and tech blogger Ed Zitron, OpenAI blew $8.7 billion serving its models, a process called inference, on Azure alone in the first three quarters of 2025. That's more than double the $3.7 billion the AI flag bearer reportedly spent in 2024. If the info in these leaks are correct, OpenAI's expense line is even worse than it looks at first blush. The report, we'll note, didn't include details on any training-specific spend at the cloud provider. It also does not mention CoreWeave and Google, which OpenAI also pays for compute capacity. Using these numbers, OpenAI would be on a trajectory to far exceed the $9 billion in cash burn previously reported by the Wall Street Journal earlier this week. However, there's reason to believe these documents may not provide a full picture as to OpenAI's financial relationship with its long-time compute partner, Microsoft. According to the Financial Times, which also got a look at the documents, a Microsoft spokesperson said "the numbers aren't quite right," but declined to comment further. Another source familiar with OpenAI suggested to the FT that the figures offered an incomplete accounting of the two company's dealings. One possibility is that these documents may not account for the possibility of cloud credits Microsoft granted to OpenAI. Those credits would likely end up lumped with other customers and show up under cost of sales in Microsoft's accounting. In that case, depending on how Microsoft has chosen to engineer its books, the figures in the report may inflate the amount of cash OpenAI is actually spending on inference with Azure each quarter. Then there's the revenue side of the picture. Zitron's report also suggests that OpenAI's sales may be significantly smaller than its previous reports about annual recurring revenues (ARRs) imply. These details are based on a 20 percent revenue share that OpenAI pays Microsoft under the company's initial $1 billion tie-up in 2019. Under that deal, Microsoft also pays OpenAI a 20 percent slice of revenue from the resale of OpenAI models and services under its brand. The documents show Microsoft received $454.7 million from OpenAI during the first half of calendar year 2025. Taking into account the 20 percent revenue share, this suggests that OpenAI's sales during the period were approximately $2.27 billion. As Zitron notes, that's approximately $2 billion short of the $4.3 billion in revenues The Information reported in early October. The documents indicate that OpenAI's revenues surged in the quarter ended Sept. 30, with Microsoft's share of sales reaching $865.9 million through that quarter, putting OpenAI's calculated revenues at $4.33 billion. In spite of the jump, these figures are still in conflict with statements OpenAI CEO Sam Altman made earlier this month that the company's annual revenues would exceed $13 billion. However, just like OpenAI's inference spend, it's possible that the figures contained within the report are incomplete. As mentioned earlier, Microsoft also pays OpenAI a 20 percent share of revenues from reselling the AI dev's models. The documents appear to apply only to Azure. But Microsoft may be paying OpenAI separately out of other segments within its software business. Microsoft integrates OpenAI products into several products including its Bing search engine, Office 365 productivity Suite, GitHub copilot code assistant. Unfortunately, Microsoft has yet to break out AI-related revenues in the associated fields. However, Redmond's own financial reporting did indicate that OpenAI had a net loss in the neighborhood of $12 billion during the quarter ended Sept. 30. If nothing else, Wednesday's reports underscore the need for greater financial transparency from OpenAI and its partners. Customers planning for the AI revolution need to understand if the finances don't work, as that would imply either a slower buildout or higher prices than expected. El Reg reached out to Microsoft and OpenAI for their comment. Microsoft declined, and OpenAI did not respond by press time. ®

OpenAI Will Lose $74 Billion the Same Year That Anthropic Breaks Even: Report

OpenAI has committed more than $1.4 trillion to building out its data center infrastructure in the next 8 years. It's projected to lose $74 billion in 2028 alone, according to a new report from the Wall Street Journal citing internal documents from the company. On the opposite end of the spectrum, AI startup Anthropic is chugging along with a fraction of the hype that Sam Altman's company enjoys, and it will reportedly manage to break even that same year. The documents seem to suggest very different paths to profitability for the companies. Anthropic, which most recently raised money from investors at a nearly $200 billion valuation, has quietly been building up a subscriber base of corporate customers. According to a report from WSJ earlier this month, about 80% of Anthropic's revenue comes from business clients, of which it has over 300,000 customers. OpenAI claims to have about one million enterprise subscribers and more than seven million total ChatGPT for Work "seats" (a figure it happened to share just days after Anthropic's numbers were made public). But, according to the Journal's reporting, OpenAI's margins on those subscriptions are much smaller than those of Anthropic. One would think, given that, OpenAI might be spending its funding frugally until it figures out a clear path to profitability. Instead, the company is going all out on building out data centers and scooping up chips to train and power its models. It's also straight-up burning cash with the strategy of just getting people hooked on its ecosystem in the hopes that they can eventually be monetized. Earlier this week, Forbes reported that Sora 2, the company's video generation model that blew up with millions of people creating 10-second clips loaded with copyright infringement cases in waiting, costs the company about $15 million per day, which works out to an annualized rate of $5 billion. It seems like OpenAI's approach is something closer to the ZIRP-era of Big Tech, where firms were happy to run deep into the red because they were getting money for nothing with zero interest. That led to the Uber-like approach of driving prices down to unrealistically low levels to capture as much of an audience as possible before eventually flipping the switch once you're the only game in town. It's not clear that the path is really there for OpenAI, but it sure seems to think it's viable. Per WSJ, the company's own internal documents show a rapidly growing revenue base that will lead to the company turning a profit by 2030, which would still be more than halfway into its eight-year commitment to build out expensive data center operations. On its way to finally eking into the black on its bottom line, it'll reportedly burn about 14 times as much money as Anthropic. The problem for Anthropic and any other company operating in the AI space is that OpenAI just might take everyone down with it. The company's financial commitments tie it tightly to lots of players that are key to the AI sector, and its failure would result in a pretty major domino effect. It's no wonder OpenAI is out lobbying for government guarantees on its spending.

Anthropic aims for profitability by 2028 while OpenAI's losses could reach US$74 billion

AI startup Anthropic is projected to break even by 2028, fueled by steady enterprise client revenue, whereas OpenAI is expected to continue incurring significant operating losses until 2030 due to heavy investments in compute infrastructure. Financial documents reviewed by the Wall Street Journal indicate that OpenAI's operating losses could reach US$74 billion in 2028, roughly three-quarters of its anticipated revenue, in contrast to Anthropic's target of profitability within the same timeframe. Anthropic's business-to-business focus begins yielding results While Anthropic initially trailed during the launch surge of ChatGPT, its emphasis on business-to-business applications has started to bear fruit. The company's Claude chatbot specializes in programming and business functions, with enterprise clients contributing approximately 80% of its revenue. By steering clear of costly developments in image and video generation, Anthropic maintains a more balanced growth strategy, linking revenue and expenses cautiously to avoid overspending. OpenAI's aggressive expansion results in massive cash burn OpenAI, on the other hand, is accelerating investments in custom chips and data centers to broaden its AI portfolio, offering large stock incentives to attract leading researchers. Its estimated cash burn rate through 2030 is about 14 times higher than that of Anthropic, necessitating continuous external financing to cover operational costs. OpenAI CEO Sam Altman recently stated on the social media platform X that infrastructure expenses over the next eight years could reach as high as US$1.4 trillion, sparking debate around funding sustainability. Nonetheless, Altman expressed confidence in a podcast interview that OpenAI would achieve annual revenues of US$100 billion by 2027. Major cloud providers heavily involved in supporting both companies This rivalry has significant implications for the major US cloud service providers that supply infrastructure for these AI startups. Microsoft, the largest cloud partner for OpenAI, revealed in filings with the US Securities and Exchange Commission that it has committed US$13 billion in investments and disbursed US$11.6 billion by the end of the first quarter of fiscal 2026 (September 30, 2025). Microsoft's net income fell by US$3.1 billion post-tax during this period, suggesting that OpenAI's losses for the third quarter of 2025 alone exceeded US$11.5 billion. Conversely, Amazon Web Services and Alphabet's Google are key cloud partners backing Anthropic, providing proprietary AI chip computing resources. AWS has pledged US$8 billion to Anthropic, while Google's investments total over US$3 billion, with both companies reportedly contemplating increased commitments to strengthen their influence over Anthropic's development and operations.

OpenAI says it plans to report stunning annual losses through 2028 -- and then turn wildly profitable just two years later | Fortune

The documents, which were shared with investors this summer, reveal an aggressive growth strategy that hinges on massive upfront investment in computing infrastructure, chips and data centers -- spending that CEO Sam Altman has described as necessary to meet what he sees as insatiable demand for AI capabilities. The company anticipates burning through roughly $9 billion this year on $13 billion in sales, a cash burn rate of approximately 70% of revenue. But the financial trajectory only gets steeper before it improves. The documents show OpenAI projects that by 2028, its operating losses will balloon to roughly three-quarters of that year's revenue, driven primarily by ballooning spending on computing costs. That's the same year competitor Anthropic expects to break even, according to WSJ. The numbers underscore the stark divergence between the two most valuable AI startups. While both companies currently burn cash at similar rates relative to revenue, their paths forward split dramatically. Anthropic forecasts dropping its cash burn to roughly one-third of revenue in 2026 and down to 9% by 2027. OpenAI, by contrast, expects its burn rate to remain at 57% in 2026 and 2027. OpenAI's plan relies on what amounts to a bet on dominance. The company recently announced it has signed up to $1.4 trillion in commitments over the next eight years for computing deals with cloud and chip giants. It's spending almost $100 billion on backup data-center capacity alone to cover unforeseen demand from future products and research. "Demand for AI exceeds available compute supply today," an OpenAI spokesman told WSJ. "Every dollar we invest in AI infrastructure goes to serving the hundreds of millions of consumers, businesses, and developers who rely on ChatGPT to get more done." OpenAI did not immediately respond to Fortune's request for comment. Altman's strategy for OpenAI requires near-constant fundraising to keep the startup alive, but could backfire if markets cool on AI or its near-term profitability. Investors have already punished tech companies in recent weeks over concerns about AI spending and whether there will be enough revenue to pay for the extensive AI infrastructure buildout. OpenAI's financial figures came before it signed its most recent computing deals, meaning the company is likely set to spend even more than the documents suggest. The cash burn is expected to reach $115 billion cumulatively through 2029, according to The Information. The company's optimism about an eventual turnaround rests on revenue projections that show explosive growth. OpenAI now expects to reach about $200 billion in annual revenue by 2030, with the company projecting it will turn cash flow positive beginning in 2029 or 2030. Those figures represent substantial increases over earlier projections shared with investors. OpenAI Chief Financial Officer Sarah Friar said last week the company has healthy margins and could break even if it wanted to. She highlighted the fast growth of OpenAI's enterprise business, and said the startup was still experimenting with new business models. Altman has defended the massive infrastructure spending as a strategic necessity. "We believe the risk to OpenAI of not having enough computing power is more significant and more likely than the risk of having too much," he posted last week on X. The contrasting approaches between OpenAI and Anthropic illustrate two distinct philosophies for navigating the AI boom. Anthropic's costs are growing at a pace more in line with revenue, and the company is focused on increasing sales among corporate customers, which account for about 80% of its revenue. Notably, Anthropic is trying to avoid OpenAI's costly forays into image and video generation, which require significantly more computing power. Sora 2, OpenAI's new video-creation app, might be costing the company millions each day. OpenAI, meanwhile, is diversifying rapidly. The company recently launched Sora 2 and its first web browser, Atlas. It's also working on a consumer hardware device with Jony Ive's design company, researching humanoid robots, and looking to add e-commerce and advertising features for ChatGPT. Whether OpenAI's gamble pays off will depend on whether demand for its products continues to surge at the pace needed to justify the unprecedented spending. The company expects to burn through roughly 14 times as much cash as Anthropic before turning a profit.

OpenAI Is Reportedly Burning a Ludicrous Amount of Cash on Sora

Even OpenAI knows the "economics are currently completely unsustainable." Despite its half-a-trillion-dollar valuation, the reality is that OpenAI is almost certainly burning through cash at an alarming rate. According to recent filings, the ChatGPT maker lost a whopping $12 billion last quarter alone. Yet, it wants to spend well over $1 trillion over the next several years, once again stoking fears over an AI bubble that could wipe out the entire US economy if it were to burst. Even its AI video-generating app, Sora, which debuted in late September, is likely costing the company an astronomical amount of money to run, as Forbes reports. The app -- which is currently being used to spew a disturbing quantity of largely meaningless AI slop onto the web, but is still only available for a minuscule number of early users -- could already be costing the firm $5 billion a year, or roughly $15 million per day, according to the publication's estimates. A single ten-second clip could cost OpenAI roughly $1.30, Cantor Fitzgerald analyst Deepak Mathivanan told Forbes. Even OpenAI's Sora lead Bill Peebles admitted in an October 30 tweet that the "economics are currently completely unsustainable." While we don't have a strong sense of the accuracy of Forbes' estimates, as they rely on "several moving targets," such as fluctuating prices of AI chips, efficiency, and the number of users and videos being generated, the bottom line is that it's staggeringly expensive to run a large-scale video-generating app. Using AI to generate video is vastly more resource-intensive than having a tool like ChatGPT output text, which already requires vast amounts of resources. Besides an enormous and growing carbon footprint, making financial sense of OpenAI's foray into AI video slop remains difficult. In an early October blog post, OpenAI CEO Sam Altman admitted that the company launched the app in the absence of a sound financial plan to recoup the enormous costs of running Sora, let alone meaningfully address glaring copyright infringement issues that persist to this day. "It's a classic internet playbook to not focus on the costs initially so much as building an audience and building an engagement because we've seen time and again, these companies can figure out ways to monetize this engagement," financial group Mizuho analyst Lloyd Walmsley told Forbes. Late last month, OpenAI started limiting users to 30 free videos per day and started charging $4 for roughly ten additional videos beyond the daily limit. But even the daily limit could soon go away. "Eventually we will need to bring the free gens down to accommodate growth (we won't have enough [graphics processing units] to do it otherwise!)," Peebles tweeted, "but we'll be transparent as it happens." "In the meantime, enjoy the crazy usage limits," he added. Apart from blowing billions of dollars on slop memes that are polluting the internet, OpenAI has plenty of other Sora-related fires to put out as well. For one, the company is actively drawing the ire of rightsholders over copyright issues. Last week, a group representing Studio Ghibli, Bandai Namco, Square Enix, and other major Japanese publishers sent a letter to OpenAI demanding that it stop using their copyrighted content to train the video-generating AI tool. In short, Sora is only the tip of the iceberg of OpenAI's alarming financial situation. As the company continues to light tens of billions of dollars on fire, the firm is under major pressure to justify its spending commitments. And at the end of the day, it's all to generate clips of SpongeBob SquarePants cooking meth and Mister Rogers going on expletive-filled rants.

OpenAI reportedly burning $15M a day to power Sora video app

The cost equates to more than a quarter of OpenAI's projected $20 billion in yearly revenue. OpenAI is reportedly spending an estimated $15 million per day, or $5.4 billion annually, to power its new Sora video generation app, according to an analysis by Forbes. This high operational cost, which Forbes noted would be equivalent to more than a quarter of the company's projected $20 billion annual recurring revenue, comes as the AI firm reportedly lost over $12 billion last quarter. The estimates, which OpenAI declined to comment on, are based on analyst calculations and app usage data. The Sora app, which launched on iOS in September, reached 4.5 million downloads by Halloween. Forbes cited an estimate from Deepak Mathivanan of Cantor Fitzgerald, who calculated that a standard 10-second Sora video costs OpenAI approximately $1.30 to generate, a figure that analyst AJ Kourabi of SemiAnalysis deemed "reasonable." Forbes arrived at the $15 million daily figure by estimating that if 25% of Sora's 4.5 million users post an average of 10 videos a day, it would result in 11.3 million daily videos. This high burn rate was seemingly confirmed by OpenAI's head of Sora, Bill Peebles, who stated on October 30 that "The economics are currently completely unsustainable." Analysts described the strategy as a "classic internet playbook" of absorbing significant losses to capture market share and build user engagement. The free access also allows OpenAI to gather massive amounts of valuable training data, as users provide text prompts for the videos Sora creates. Analysts also noted that the cost of video generation is expected to decrease significantly over the next year, with Mathivanan estimating it could get five times cheaper by 2026.

Anthropic Has A Sharp Edge Against OpenAI -- Cheaper Chips - Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN)

As the AI race heats up, Anthropic may have found an advantage that money can't easily buy -- efficiency. The OpenAI rival, best known for its Claude models, has quietly built its strategy around cost discipline and compute innovation. And that could prove decisive in the next wave of AI adoption. Track AI stocks via the AIQ ETF here. Read Also: Musk, Anthropic Battle To Build Next Microsoft, Salesforce The Power Play Behind Claude Anthropic's recent multibillion-dollar deal with Alphabet Inc's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google isn't just about scale -- it's about savings. Reuters reports the company will expand its use of Google's custom Tensor Processing Units (TPUs), locking in vast compute capacity at a claimed "superior price-performance ratio." In an era when training costs for cutting-edge models are exploding, securing cheaper, more efficient chips gives Anthropic an edge not in hype, but in economics. OpenAI relies heavily on Microsoft Corp's (NASDAQ:MSFT) Azure and Nvidia Corp (NASDAQ:NVDA) GPUs. But Anthropic's pivot to TPUs may yield leaner infrastructure costs -- a subtle but powerful differentiator. It's the same logic that once allowed Amazon.com's (NASDAQ:AMZN) AWS to out price rivals in cloud computing: efficiency compounds faster than scale. Read Also: ChatGPT Vs. Anthropic: Can A 400% Growth Safety Play Beat Consumer Hype? Cost Discipline As A Competitive Moat The second lever is pricing transparency. Anthropic has consistently positioned its Claude models as accessible to developers and enterprises, often signaling lower token costs compared with OpenAI's GPT-4 tier. The exact numbers vary, but the message is consistent -- Anthropic wants to make advanced AI affordable. That matters because the enterprise AI market is increasingly cost-sensitive. A model that offers comparable reasoning power at a fraction of the compute cost isn't just attractive, it's sticky. If AI's next phase is about who can deliver intelligence per dollar, not just intelligence per parameter, Anthropic's cheaper chips might just prove its sharpest edge yet. Read Next: Palantir Vs. OpenAI: The AI Underdog That Might Be The Smarter Bet Image: Shutterstock AMZNAmazon.com Inc$248.531.69%OverviewGOOGAlphabet Inc$290.974.03%GOOGLAlphabet Inc$290.314.12%MSFTMicrosoft Corp$506.051.86%NVDANVIDIA Corp$197.875.17%Market News and Data brought to you by Benzinga APIs

Anthropic Leads OpenAI in Race to Profitability | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. Anthropic, which has a growing number of business customers thanks to its Claude chatbot, expects to break even for the first time in 2028, The Wall Street Journal reported Monday (Nov. 10), citing documents it obtained. During that year, OpenAI projects that its operating losses would jump to around $74 billion, or roughly three-quarters of revenue, due to surging spending on computing costs, the report said. The company, famous for its ChatGPT AI model, also expects to burn around 14 times as much cash as Anthropic before becoming profitable in 2030. These figures do not take into account the company's recent computing deals, which means it will likely spend even more in the years ahead, according to the report. Anthropic is working to boost sales among its corporate customers, which make up around 80% of revenue, while not venturing into the expensive image and video ventures as OpenAI, the report said. Neither OpenAI nor Anthropic responded to PYMNTS' request for comment. The business projections, each shared with investors over the summer, indicate that the most valuable AI startups have different strategies for expanding, per the report. OpenAI expects narrower margins than Anthropic from its sales in the next five years but is spending more on the materials to build its technology and on compensation to attract talent, according to the report. It's in keeping with CEO Sam Altman's goal of transforming OpenAI into a multitrillion-dollar company, a strategy that needs continual fundraising, the report said. It's also a plan that could blow up if markets sour on AI or OpenAI's near-term profitability. Investors have pulled away from tech companies in recent weeks due to worries about AI spending and whether there will be enough money to cover the massive expansion of AI infrastructure, according to the report. The PYMNTS Intelligence report "AI Agents in the Enterprise" found that roughly 1 in 10 chief financial officers are using or piloting AI agents. However, no CFO said they are ready to grant substantial or full autonomy.

Google Eyes Further Stake In Anthropic, Potentially Valuing The AI Start-Up At $350 Billion: Report - Advanced Micro Devices (NASDAQ:AMD), Amazon.com (NASDAQ:AMZN)

Alphabet's Google (NASDAQ:GOOGL) (NASDAQ:GOOG) is reportedly considering a significant increase in its investment in the artificial intelligence (AI) startup Anthropic. Google's Next Move With Anthropic The new funding round could potentially value Anthropic at over $350 billion, Business Insider reported on Wednesday. The specifics of the deal are still being negotiated and could take various forms. The potential deal, which remains under negotiation, could involve a strategic investment in which Google offers additional cloud computing services to Anthropic, a convertible note, or a priced funding round scheduled for early next year, according to the report. The precise size of Google's investment and whether other investors will participate in the round are still unclear. Google and Anthropic did not immediately respond to Benzinga's requests for comment. See Also: Jensen Huang Warns China Will Win The AI Race Days After Donald Trump Said US Won't Let 'Anybody' Have Nvidia's Most Advanced Chips Anthropic's Annual Revenue Goal This news follows a series of significant events for Anthropic. In January 2025, Google invested over $1 billion in Anthropic. Later in October, Anthropic announced plans to expand its use of Google Cloud technologies, a deal worth "tens of billions" of dollars. This move was expected to significantly boost Anthropic's compute resources for AI research and product development. Anthropic, backed by Google and Amazon.com (NASDAQ:AMZN), has been projecting to nearly triple its annualized revenue by next year, driven by strong demand from enterprise clients. The company aims to reach over $20 billion in annualized revenue in its base scenario and up to $26 billion in its best-case scenario for the next year. Rival AI start-up, OpenAI, has also entered into significant partnerships with tech giants like Amazon, Advanced Micro Devices (NASDAQ:AMD), Microsoft (NASDAQ:META), and Nvidia (NASDAQ:NVDA) over the past few weeks. Alphabet's AI Bet Strengthens Alphabet reported a 16% rise in third-quarter revenue, driven by strong growth in digital advertising and cloud computing. The gains are helping fund its expanding artificial intelligence initiatives. Google Cloud led the surge, generating $15.2 billion in revenue -- a 34% increase from Q3 2024 -- underscoring the company's accelerating focus on AI infrastructure amid broader market skepticism about the sustainability of the AI rally. On a year-to-date basis, Alphabet surged 49.37%. On Wednesday, it rose 2.41% to close at $284.75, as per data from Benzinga Pro. Benzinga's Edge Rankings place Google in the 85th percentile for quality and the 91st percentile for momentum, reflecting its strong performance in both areas. Check the detailed report here. READ NEXT: Perplexity Fires Back At Amazon's Legal Threat On Agentic Shopping: 'Bullying Is Not Innovation' Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AMDAdvanced Micro Devices Inc$256.32-%OverviewAMZNAmazon.com Inc$250.10-0.04%GOOGAlphabet Inc$285.530.27%GOOGLAlphabet Inc$285.410.39%METAMeta Platforms Inc$639.370.54%MSFTMicrosoft Corp$506.31-0.17%NVDANVIDIA Corp$197.861.36%Market News and Data brought to you by Benzinga APIs

Anthropic on track to turn a profit faster than rival OpenAI - WSJ By Investing.com

Investing.com - Artificial intelligence startup Anthropic is on pace to turn a profit faster than ChatGPT maker and close rival OpenAI, according to the Wall Street Journal. Citing documents shared with investors, the WSJ said Anthropic, whose Claude chatbot services have become popular among businesses and coders, now expects to break even in 2028. OpenAI, meanwhile, sees its operating losses increasing to around $74 billion, as the company which has become a figurehead for a surge in enthusiasm around AI intends to continue spending heavily on its computing capabilities. The report said OpenAI now projects it will post a profit in 2030. The documents are indicative of the differing strategies being adopted by the world's two largest AI startups, the report suggested, noting that OpenAI plans to spend far more on chips and data centers and dish out stock-based compensation to entice large investors. Anthropic, as a result, is tipped to carry wider margins than OpenAI over the next five years, the WSJ said. Massive spending plans have become increasingly common in the AI segment, reflecting a push by mega-cap technology groups to bolster their position in the race to both harness and monetize the nascent technology. But investors have begun to flag worries over the scope of the capital expenditures and when they will see tangible returns. Notably, the WSJ said OpenAI's financial figures came prior to a series of new computing deals with cloud and chip groups which are anticipated to drive up spending even further. CEO Sam Altman has said financial commitments from the agreements over the next eight years amount to $1.4 trillion. Anthropic, on the other hand, is attempting to keep costs roughly in line with revenue, the WSJ said, adding that the firm has focused on sales to enterprise clients and steering clear of more expensive offerings like image and video generation.

Google in early talks to increase investment in Anthropic - Business Insider By Investing.com

Investing.com-- Alphabet's (NASDAQ:GOOGL) Google is in early discussions to expand its investment in artificial intelligence startup Anthropic, Business Insider reported on Thursday, citing people familiar with the matter. The potential deal could value Anthropic at over $350 billion and may take several forms, including a strategic investment involving additional cloud services, a convertible note, or a priced funding round early next year, according to the report. The size of Google's possible investment and whether other investors would participate remain unclear, the report said. Google has already invested more than $3 billion in Anthropic for a 14% stake, according to earlier reports. Founded in 2021 by former OpenAI employees, Anthropic develops the Claude family of large language models and counts both Google and Amazon (NASDAQ:AMZN) among its backers as competition intensifies with OpenAI in the fast-growing AI industry.

Anthropic will beat OpenAI where it matters most: Here's how

Anthropic's enterprise-first strategy shows a smarter path to AI growth When OpenAI launched ChatGPT in late 2022, it didn't just set off an AI revolution, it created a global arms race. Billions of dollars poured into artificial intelligence startups, each promising to outsmart the other with larger models, faster training, and more powerful infrastructure. But amid the frenzy, one company - Anthropic - has quietly taken a very different route. And if early numbers are any indication, it may just beat OpenAI where it matters most: profitability. Also read: ChatGPT as health assistant: OpenAI thinks it's better than Google and Microsoft OpenAI's trajectory is as ambitious as it is expensive. According to The Wall Street Journal, the company expects to post losses of around $74 billion by 2028, largely driven by its massive investments in compute infrastructure and model training. Even with revenue nearing $13 billion in 2025, its burn rate remains high. This is the cost of scale. OpenAI's vision isn't just to make AI tools, it's to build a foundational platform for the world's future software ecosystem. From powering Microsoft Copilot to licensing GPT models across industries, its reach is enormous. But so is the bill. Running the world's most advanced AI systems means maintaining hundreds of thousands of GPUs, paying for continuous model retraining, and handling the energy and data costs that grow exponentially. The company's infrastructure ambitions, though visionary, may be eating into its ability to reach sustainable growth anytime soon. Also read: AI is moving scarily fast: OpenAI's 2025 progress report explained By contrast, Anthropic, founded by former OpenAI researchers Dario and Daniela Amodei, has charted a more focused path. The company expects to break even by 2028, according to internal projections shared with investors. That's four years earlier than many analysts anticipated, and far sooner than OpenAI's profitability horizon. Anthropic's strategy hinges on restraint. Instead of flooding the consumer market with AI chatbots and image generators, it has concentrated on enterprise and developer clients. Its Claude AI assistant, for example, has become a go-to model for businesses prioritizing safety, privacy, and interpretability over viral engagement. Internal forecasts suggest Anthropic's cash burn will fall from 70% of revenue in 2025 to just 9% by 2027, even as its revenue grows past $4 billion. That's not just an operational win, it's a signal that AI companies can scale responsibly without collapsing under infrastructure debt. The contrast between the two firms highlights a deeper divide in AI economics. OpenAI's model is built for mass adoption, its products are everywhere, from classrooms to corporate dashboards. But that ubiquity comes with enormous computational cost. Anthropic's model is built for targeted efficiency. Its clients pay for reliability and control, not novelty. The result: lower server loads, fewer free users, and a cleaner revenue stream. In a space where every new model release costs tens of millions of dollars in training and deployment, that difference in focus could decide who survives long-term. This divergence raises a critical question: what does "winning" mean in AI? For years, dominance was measured in benchmark scores, model size, and user numbers. But as investors grow wary of indefinite spending, the conversation is shifting toward profitability, sustainability, and business fundamentals. If Anthropic manages to turn profitable before OpenAI, it could reshape how AI firms are valued, away from "who's smartest" toward "who's smartest with their money." None of this means OpenAI is losing the race. Its technology remains the most powerful and commercially integrated in the industry. But Anthropic's restraint offers a valuable lesson in maturity, one that even Silicon Valley seems to be rediscovering: innovation without discipline is just expensive ambition.