According to company financial documents, Microsoft-backed OpenAI does not expect to achieve annual profitability until 2029, when the company's annual revenue will reach $100 billion.

However, according to analysis, the company's annual losses in 2026 may be as high as $14 billion, almost three times the expected losses this year. OpenAI also expects to spend about $200 billion by the end of this decade, excluding stock compensation, but not in cash. From 2023 to 2028, the company's total losses are expected to be $44 billion.

For OpenAI, a large part of the company's expenses are used to train AI models, and the annual cost is expected to reach $9.5 billion by 2026. The report shows that about 60%-80% of the company's expenses of more than $200 billion will be used for the operation and maintenance of AI models.

In addition, Microsoft will extract about 20% of OpenAI's revenue, which is also higher than previously expected.

Last week, OpenAI completed its latest round of financing totaling $6.6 billion, bringing the company's valuation to $157 billion. Microsoft and Nvidia both participated in this round of financing.

In 2015, OpenAI was established as a non-profit organization, and its daily operations mainly rely on external financing. The company's official website shows that OpenAI has raised a total of US$130.5 million over the years, and said that "donations alone cannot match the computing power and talent costs required to promote core research."

In September, OpenAI CEO Sam Altman announced at a conference that the rather complex non-profit corporate structure will be adjusted in 2025. It is reported that OpenAI will adjust to a more traditional for-profit company in addition to retaining a non-profit department.

Oppenheimer, an investment bank, recently published a research report saying that Microsoft's future revenue and profit expectations may be too high, mainly considering OpenAI's heavy losses and the slow market adoption of AI technology. Therefore, it downgraded its stock rating on Microsoft from "outperforming the market" to "in line with the market".

Excluding equity compensation, OpenAI may lose $5 billion this year and may be between $2 billion and $3 billion in fiscal 2025. These potential losses will put considerable pressure on Microsoft, which holds a 49% stake in it. Analysts also pointed out that as Microsoft increases capital expenditures on high-performance computing components, gross profit margins and EBITDA margins may decline in fiscal 2025. Capital expenditures are expected to increase to $63 billion, a year-on-year increase of 14%, and depreciation expenses are expected to increase by 28% to $29 billion.

Not only that, on September 18, the Federal Reserve announced a 50 basis point cut in interest rates, which may reduce Microsoft's net interest income from its $76 billion cash reserves. And because of the rising operating costs associated with AI investments, market expectations for Microsoft's financial performance will also decline.