OpenAI: "386 trillion won in cash burn through 2030"

[Financial News]  

OpenAI is preparing for a net cash outflow of $278 billion, or approximately 386 trillion won, by the end of 2030. The company is expected to pursue an initial public offering as early as this year, but the outlook remains bleak: even after going public, its cash outflows are expected to far exceed inflows for at least four years. OpenAI was recently valued at $1.2 trillion, or approximately 1,667 trillion won, during investment negotiations. The company is reportedly seeking an even higher valuation, but its value has already increased by $348 billion, or approximately 483 trillion won, from its previous valuation of $852 billion.

The Financial Times (FT) reported on the 19th (local time) that OpenAI had told investors its net free cash flow (NFCF) would reach negative $278 billion over the five-year period from this year through 2030.
OpenAI made this projection even as it forecast that revenue would grow nearly tenfold, from $36 billion this year to $350 billion in 2030. Cumulative revenue is also expected to reach $840 billion by the end of 2030.
OpenAI has urged existing investors, who have already poured tens of billions of dollars into the company, to make substantial additional investments. It has promised that those investments will ultimately pay off.
OpenAI's investments are also a major factor for infrastructure companies, including semiconductor and network equipment makers such as NVIDIA. At an investor briefing, the company reportedly said it would invest approximately $856 billion in computing capacity and infrastructure by 2030.
OpenAI secured $122 billion in funding last March, but said the money would be depleted by 2028.

OpenAI competes with Anthropic in the U.S. market and with low-cost Chinese AI models in global markets. As competition intensifies, a price war has erupted despite the company's massive investments.
There have been some positive results. Annualized revenue rose by approximately 20% in July, thanks to a new model launched on the back of major investments. As a result, OpenAI was able to reduce its projected negative NFCF through 2030 by $27 billion from the level it had forecast in May.
Meanwhile, OpenAI had targeted an IPO this fall in a confidential filing submitted to the U.S. Securities and Exchange Commission (SEC) last June, but the plan was later postponed. Calls have emerged for the pace of AI development to be slowed.
Moreover, the question of how enthusiastic public-market investors would be about a company expected to burn enormous amounts of cash through 2030 also appears to be hindering OpenAI's IPO.

[email protected] Song Kyung-jae Reporter