The rapid rise of artificial intelligence has reshaped technology markets worldwide, but questions are mounting about the financial sustainability of the companies driving the revolution. A New York Times columnist has made a bold prediction: OpenAI, the high-profile AI developer behind ChatGPT, could be bankrupt within 18 months if its current spending trajectory continues.
The warning comes amid mounting evidence that AI firms are burning cash at unprecedented rates. An external report last year projected that OpenAI could spend $8 billion in 2025 and as much as $40 billion by 2028. The company has reportedly forecast profitability by 2030, but those figures suggest a significant gap between current expenditures and any realistic timeline for positive cash flow.
OpenAI has also announced plans to invest $1.4 trillion in data centers, a figure that economist Sebastian Mallaby of the Council on Foreign Relations describes as “limerence-influenced”—a reference to the passionate optimism driving many AI investments. Mallaby argues that even if OpenAI adjusts its ambitious infrastructure plans and uses its highly valued shares to fund development, the financial gap remains vast. A separate report from Bain & Company last year similarly warned of at least an $800 billion shortfall in the AI industry even under optimistic scenarios.
Mallaby frames the debate as less about whether AI will become a permanent part of everyday life and more about whether the economics of developing it will make sense over the mid- to long-term. He notes that investors typically bridge the gap between breakthrough technologies and eventual profits, but the current wave of AI companies appears to be burning cash far faster than they can generate revenue.
The economist points out that newer AI firms face a particular disadvantage compared with established tech giants such as Microsoft and Meta, which already have profitable businesses. These legacy companies can afford to wait out the period needed for AI to mature and become commercially viable, whereas newer players are under pressure to deliver returns quickly.
Another challenge is user behavior. Mallaby observes that most people are currently using free AI services and would readily switch to competitors if their preferred tools begin showing ads or imposing limits. This high level of consumer flexibility could make it difficult for AI providers to monetize their products without losing users, especially given the large number of alternatives available.
However, Mallaby believes this may be a temporary issue. As AI becomes more integrated into daily life through “agentic AI”—systems that act autonomously on behalf of users—it could become harder for people to switch platforms. Over time, these systems may learn users’ shopping habits, preferences, goals and emotional tendencies so deeply that changing providers would feel like starting over.
Mallaby does acknowledge the remarkable success of OpenAI CEO Sam Altman in raising funds. The company secured $40 billion in investment—more than any private funding round in history and surpassing even Saudi Aramco’s $30 billion raise. But he cautions that unlike Aramco and other profitable companies that went public, OpenAI lacks a clear business model and does not yet generate profits.
The financial pressures facing AI companies raise broader questions about the industry’s long-term trajectory. While AI technology may be here to stay, the market could still lose some of its earliest and most influential players. If OpenAI were to falter, it would be a dramatic twist in an industry that has already transformed the way people work, communicate and consume information.
