OpenAI's Projected Spending Soars to $115 Billion Through 2029 Amid AI Expansion
2 Sources
2 Sources
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OpenAI expects business to burn $115 billion through 2029, The Information reports
OpenAI CEO Sam Altman walks on the day of a meeting of the White House Task Force on Artificial Intelligence (AI) Education in the East Room at the White House in Washington, D.C., U.S., September 4, 2025. OpenAI has sharply raised its projected cash burn through 2029 to $115 billion as it ramps up spending to power the artificial intelligence behind its popular ChatGPT chatbot, The Information reported on Friday. The new forecast is $80 billion higher than the company previously expected, the news outlet said, without citing a source for the report. OpenAI, which has become one of the world's biggest renters of cloud servers, projects it will burn more than $8 billion this year, some $1.5 billion higher than its projection from earlier this year, the report said. The company did not immediately respond to Reuters request for comment. To control its soaring costs, OpenAI will seek to develop its own data center server chips and facilities to power its technology, The Information said. OpenAI is set to produce its first artificial intelligence chip next year in partnership with U.S. semiconductor giant Broadcom, the Financial Times reported on Thursday, saying OpenAI plans to use the chip internally rather than make it available to customers. The company deepened its tie-up with Oracle in July with a planned 4.5-gigawatts of data center capacity, building on its Stargate initiative, a project of up to $500 billion and 10 gigawatts that includes Japanese technology investor SoftBank. OpenAI has also added Alphabet's Google Cloud among its suppliers for computing capacity. The company's cash burn will more than double to over $17 billion next year, $10 billion higher than OpenAI's earlier projection, with a burn of $35 billion in 2027 and $45 billion in 2028, The Information said.
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OpenAI says spending to rise to $115 billion through 2029: Information
OpenAI is in the process of developing its own data center server chips and facilities to drive the technologies, in an effort to control cloud server rental expenses, according to the report. The company predicted it could spend more than $8 billion this year, roughly $1.5 billion more than an earlier projection, The Information said. Another factor influencing the increased need for capital is computing costs, on which the company expects to spend more than $150 billion from 2025 through 2030. The cost to develop AI models is also higher than previously expected, The Information said.
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OpenAI, the company behind ChatGPT, has dramatically increased its projected cash burn to $115 billion through 2029. This surge in spending is driven by the need for more computing power and the development of custom AI chips and data centers.
OpenAI's Unprecedented Spending Forecast
OpenAI, the artificial intelligence powerhouse behind ChatGPT, has dramatically revised its spending projections through 2029. The company now anticipates a staggering cash burn of $115 billion, a substantial $80 billion increase from its previous forecast
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. This significant adjustment underscores the escalating costs associated with developing and maintaining cutting-edge AI technologies.
Source: CNBC
Immediate Financial Implications
For the current year, OpenAI projects spending to exceed $8 billion, surpassing earlier estimates by approximately $1.5 billion
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. The company's financial trajectory appears to be on a steep incline, with projected expenditures more than doubling to over $17 billion in the following year. This represents a $10 billion increase from initial projections1
. The spending curve continues its sharp ascent, with anticipated burns of $35 billion in 2027 and $45 billion in 20281
.Driving Factors Behind the Spending Surge
The primary catalyst for this unprecedented spending forecast is the mounting cost of computing power. OpenAI anticipates allocating more than $150 billion towards computing expenses from 2025 through 2030
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. This substantial investment reflects the intense computational demands of developing and running sophisticated AI models, which have proven more resource-intensive than initially projected2
.Strategic Initiatives to Manage Costs
To address these escalating expenses, OpenAI is embarking on ambitious initiatives to develop proprietary technologies:
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Custom AI Chips: The company plans to produce its first artificial intelligence chip in 2026, collaborating with semiconductor giant Broadcom. This chip is intended for internal use rather than commercial distribution
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Data Center Development: OpenAI aims to establish its own data center facilities, a move designed to reduce reliance on external cloud providers and control costs
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Expanding Partnerships and Infrastructure
Despite efforts to internalize some technological capabilities, OpenAI continues to forge strategic partnerships to meet its immense computing needs:
- A deepened collaboration with Oracle, involving plans for 4.5 gigawatts of data center capacity
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. - The ongoing Stargate initiative, a monumental project with a potential investment of up to $500 billion and 10 gigawatts of capacity, involving Japanese technology investor SoftBank
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. - Addition of Google Cloud to its roster of computing capacity suppliers, diversifying its resources
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Industry Implications and Future Outlook
OpenAI's revised spending forecast sends ripples through the AI industry, setting new benchmarks for investment in artificial intelligence development. As the company pushes the boundaries of AI capabilities, it simultaneously grapples with the economic challenges of sustaining such rapid technological advancement. The success of OpenAI's strategies to manage these colossal expenses while maintaining its position at the forefront of AI innovation will likely shape the trajectory of the entire sector in the coming years.
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