OpenAI is still figuring out how to make money, but wants you to believe in it
- Reference: 1768919668
- News link: https://www.theregister.co.uk/2026/01/20/openai_money/
- Source link:
If you buy her logic, you must believe some things to be true, regardless of the poorly connected thread of logic that appears to hold them together. In what we can only assume is a pitch to soften up the market for more investment and possibly an IPO, Friar argues that one of the things people should believe about OpenAI is that the more money it spends, the more money it makes.
Running through the AI poster child's achievements over the last couple of years, Friar said that the business's compute grew 9.5x from 2023 to 2025 from 0.2 GW to around 1.9 GW. Meanwhile, "revenue followed the same curve" by growing 10x in the same period from $2 billion to more than $20 billion in 2025.
[2]
"We firmly believe that more compute in these periods would have led to faster customer adoption and monetization," she said.
[3]
[4]
The more you spend, the more you make. It can be true, of course, but it doesn't always follow.
What OpenAI needs is for people to go from using its AI tools the way they use them now to using them more in the future.
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Rest assured that is on the to-do list for 2026. "The priority is closing the gap between what AI now makes possible and how people, companies, and countries are using it day to day. The opportunity is large and immediate, especially in health, science, and enterprise, where better intelligence translates directly into better outcomes," she said.
The American aphorism "if you're so smart, why ain't you rich?" springs to mind.
Nonetheless, Friar sees monetization naturally following the kind of investment in computing power necessary to stress the electricity resources of the world's largest economy.
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"As intelligence moves into scientific research, drug discovery, energy systems, and financial modeling, new economic models will emerge. Licensing, IP-based agreements, and outcome-based pricing will share in the value created. That is how the internet evolved. Intelligence will follow the same path," she asserts.
So, we have the old "something will emerge" argument, which is guaranteed to win over any bank manager who is asked for an unsecured loan for magic beans.
Speaking of banks, [7]HSBC last year glanced at OpenAI's plans to balance the books and was not entirely convinced that everything added up. It predicted OpenAI's ChatGPT consumer products would attract 3 billion regular users by 2030, up from 800 million last year, increase subscription rates (10 percent versus 8 percent), and increase corporate demand for APIs and licensing, plus a larger share of digital advertising revenue for AI companies.
Nonetheless, OpenAI "would need $207 billion of new financing by 2030," the bank said.
Separate analysis underscores how much would need to change to make the LLM builder viable: right now, 95 percent of the 800 million people using ChatGPT, which generates roughly 70 percent of the company's recurring revenue, aren't paying.
[8]OpenAI invests in brain-interface biz co-founded by CEO Sam Altman
[9]OpenAI to serve up ChatGPT on Cerebras' AI dinner plates in $10B+ deal
[10]OpenAI putting bandaids on bandaids as prompt injection problems keep festering
[11]ChatGPT is playing doctor for a lot of US residents, and OpenAI smells money
Out of the mix of paying customers and potential business models, OpenAI is clearly hoping something will emerge.
So do we, and that is not just El Reg's famous sense of goodwill and generosity toward the tech industry talking.
Nvidia, OpenAI, Microsoft, Oracle, AMD, CoreWeave, xAI, and a few others are all signed up to [12]mutually dependent deals , some of which involve exchanges of stock.
How this might unravel is yet unclear.
Some commentators have noted the importance to the world as a whole. Financial Times contributing editor Ruchir Sharma [13]pointed out last year that AI accounted for 40 percent of US GDP growth and 80 percent of the gains in US stocks in 2025.
More recently, the IMF predicted US growth would strongly outpace the rest of the G7 this year, forecasting an expansion of 2.4 percent in 2026 and 2 percent in 2027. Tech investment had surged to its highest share of US economic output since 2001, helping drive growth, the IMF found.
However, Pierre-Olivier Gourinchas, IMF chief economist, [14]said there were "reasons to be somewhat concerned" about the "risk of a market correction, if expectations about AI gains in productivity and profitability are not realized."
Tiptoeing the fine line between wishful thinking and begging, Friar's missive reminds us how important OpenAI's plans might be to us all.
Six years ago, Sundar Pichai, [15]CEO of Google's parent company, Alphabet, told the world that AI would be as profound, in terms of human evolution, as the harnessing of fire. One thing is for sure – the industry certainly has a big enough flame to make sure the world's economy burns down. ®
Get our [16]Tech Resources
[1] https://openai.com/index/a-business-that-scales-with-the-value-of-intelligence/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aW-0wBDWmm5mFOdf0fz8dwAAA44&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW-0wBDWmm5mFOdf0fz8dwAAA44&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aW-0wBDWmm5mFOdf0fz8dwAAA44&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW-0wBDWmm5mFOdf0fz8dwAAA44&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aW-0wBDWmm5mFOdf0fz8dwAAA44&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2025/11/26/openai_funding_gap_hsbc
[8] https://www.theregister.com/2026/01/16/openai_merge_labs_brain_interface_investment/
[9] https://www.theregister.com/2026/01/15/openai_cerebras_ai/
[10] https://www.theregister.com/2026/01/08/openai_chatgpt_prompt_injection/
[11] https://www.theregister.com/2026/01/05/chatgpt_playing_doctor_openai/
[12] https://www.theregister.com/2025/11/04/the_circular_economy_of_ai/
[13] https://www.ft.com/content/6cc87bd9-cb2f-4f82-99c5-c38748986a2e
[14] https://www.ft.com/content/2af4d92a-452c-4d35-ab55-3afce930f98a
[15] https://www.theregister.com/2020/01/27/google_world_economic_forum/
[16] https://whitepapers.theregister.com/
Re: History rhymes
The Internet had already shown itself to be useful before the dotcom bubble. It also didn't require all the data, energy and land it can consume to build datacenters.
Re: History rhymes
@Irongut
"The Internet had already shown itself to be useful before the dotcom bubble. It also didn't require all the data, energy and land it can consume to build datacenters."
But social media and the variety of companies in the dot com bubble didnt show themselves useful.
Just guessing
Did the investors ask AI for financial advice by any chance?
"revenue followed the same curve"
Which means they can never, ever make a profit. The more customers, the bigger the loss.
It's the classic "yes, we lose money on every single transaction, but we'll make it up in volume".
When will HSBC et al call in their loans?
Re: "revenue followed the same curve"
The banks won't dare to call in the loans. Doing so will result in OpenAI defaulting & going into Chapter 11, at which point the losses to the banks will be so big that their shareholders are going to start looking for some CxO heads to put on spikes.
Re: "revenue followed the same curve"
So the banks go into Chapter 11 or it's equivalent instead.
Somebody has to decide what the level of losses will be. Throwing good money after bad is not a good idea. If the losses are inevitable the sooner they're realised the less they will be.
Re: "revenue followed the same curve"
They just have to find a way to insure themselves against it. That's what the credit default swaps were in the 07-09 crash.
Re: "revenue followed the same curve"
The trick is to let the debt become so big that a default would collapse the entire US economy. At that point, you bail everyone out with taxpayer money. Then, if anyone suggests to deploy regulation to prevent this from happening again, shoot him.
Re: "revenue followed the same curve"
Please and let that be the Orange c*nts legacy - ontop of being an poor imitation Orange Hitler
Proof of the pudding
This tells us everything we need to know about the state (or potential threat) of AI.
If it was half as powerful as it's detractors make out, it would have worked out how to turn a profit for itself. Since there is absolutely no sign of it ever earning itself a penny, we can safely dismiss any of the silly notions that it is capable of dominating the world.
Compute in GW
Can we please kill this idea of measuring compute in power consumption terms?
Beyond infrastructure/waste it's an utterly meaningless metric.
Re: Compute in GW
It tells you all you need to know. The operation is measured in terms of its inputs because they cannot quantify useful outputs. If they could they'd use that measure instead.
Re: Compute in GW
It's like measuring your capabilities by how many pints you can drink.
We can measure the input.
The output must be similar but we don't tend to measure that!
Useful work? Hmm. well, immeasurable.
OpenAI, and 'AI' in general
In a nutshell:
>> OpenAI is clearly hoping something will emerge.
Investors: let's pour money in.
... new economic models will emerge
Or else we will let AI hallucinate these for us?
Just asking
Re: ... new economic models will emerge
I can only assume that is exactly what is happening.
"if expectations about AI gains in productivity and profitability are not realized."
When do they actually make this judgement? They've been saying this for two years already. You can say "Well they haven't materialised...*yet*, but we're sure they will." forever.
History rhymes
I seem to recall the same with twitter, facebook and the dot com bubble being a very similar situation. They are losing money but it will be worth it. Maybe