Researcher and independent journalist Ed Zitron went viral this month for a post on OpenAI's finances showing massive spending and steep losses at the AI giant.
The ChatGPT maker is preparing for an IPO, and investors are eager for a peak at the financials ahead of what's expected to be a historic offering. A report based on audited financial information viewed by Zitron published on June 15 showed that losses surged from $5 billion in 2024 to almost $39 billion in 2025 as the company went on a spending spree to pull ahead in the AI race.
"The financial condition of OpenAI is deeply concerning," Zitron wrote. "$38.53 billion in losses are astronomical, and far higher than most believed it would be. Losses also appear to be mounting year-over-year at a dramatic rate, and I'm not sure how this company finds a way toward any kind of sustainability or profitability."
What the market pros are saying
Others have also voiced concerns about the AI maker's path to profitability. Former Fidelity fund manager George Noble described it as a "cautionary tale" in the wider AI trade, while others have wondered if surging AI compute costs will be an obstacle on the path to profitability.
But fears about OpenAI's future were in the air again following Zitron's report, coupled with the fact that OpenAI recently announced that it is considering slashing prices to better compete for customers.
Equity analyst Ross Hendricks of Porter & Company, described OpenAI situation as a "dumpster fire" in a post on X responding to Zitron's findings.
"The business sells a dollar worth of compute for $0.30 and is still considering slashing prices to avoid bleeding market share to Anthropic," he wrote.
Shivaram Rajgopal, a professor of accounting at Columbia Business School, told Business Insider that based on history, the numbers for OpenAI are unusual, particularly the fact that the company's costs ran at roughly 260% of revenue, historically much higher than that of other tech leaders when they went public.
"What makes OpenAI's situation particularly striking is that $13 billion in revenue is not a small startup," he said. "No modern tech firm of this revenue size has operated with this cost structure. Roughly 9% of that revenue came from just two strategic partners: SoftBank ($867M) and Microsoft ($303M), which raises legitimate questions about how much is arm's-length commercial demand versus captive partner spending."
Shay Boloor, chief market strategist at Futurum Equities, said that after reading Zitron's report, he thinks investors should be focused not on OpenAI's operating loss, but on another statistic.
"The most important line is the R&D and compute spend because OpenAI spent more than $19B on R&D and paid Microsoft more than $10B for R&D-related expenses with total expenses to Microsoft around $17B. So that tells me the core issue that OpenAI's most important input is compute and a lot of that compute is rented from a partner that's also a competitor," he said.
OpenAI did not respond to a request for comment.
