This week, a blog post went up on the OpenAI website, broadly discussing the company's financial outlook. The write-up is authored by Sarah Friar, OpenAI's Chief Financial Officer, where she claims that there's a direct relationship between available computing power and revenue generation, and thus, adding more AI accelerators equals more money coming into the firm's coffers.
Friar's figures say that OpenAI's computing power grew threefold every year between 2023 and 2025, from 0.2 to 0.6 and 1.9 GW, respectively. Meanwhile, the firm's revenue purportedly followed the same pattern, at $2B, $6B, and over $20 billion at the end of last year.
Not only does Friar conclude that this growth pattern was never witnessed before at this scale, but she also goes on to state that if OpenAI had had even more computing power available, it would have "led to faster customer adoption and monetization," a strong claim in the face of the company's current finances. In the famous words of Jensen Huang: "the more you buy, the more you save."
Compute becomes currency
(Image credit: Nvidia)
Friar goes on to make the point that in this scenario, compute ultimately transforms from a "fixed constraint" to a portfolio, or de facto currency. That assessment aligns with similar assertions from other executives highly invested in the field, such as Nvidia's Jensen Huang, former Stability AI CEO Emad Mostaque, Microsoft's Satya Nadella, and, of course, Sam Altman himself.
The missive proceeds to make predictions, remarking on the evolution of AI usage patterns over time and describing how agent-based workflows "move from novelty to habit." For Friar, this shows a pattern of predictability that "strengthens the economics of the platform and supports long-term investment." The firm also expects that "new economic models will emerge" as AI becomes entrenched in research-heavy fields. However, over half of CEOs currently report seeing little benefit from AI deployed in the workforce.
OpenAI's words may sound reassuring at face value, but there's no shortage of virtual ink spilled on how the AI market is, at least for now, somewhat comprised of a circular economy. One company's investment feeds the next one in a cycle that tends to have comparatively little external revenue entering the loop. Many analysts predict that OpenAI is a particularly high spender, as its current burn rate is billions per month.
The company's blog post, on the contrary, makes it sound like OpenAI is actually playing it really safe. In its own words, "capital is committed in tranches against real demand signals", letting the company "lean forward when growth is there without locking in more of the future than the market has earned." Those are strong statements, but ripe for analysis.
OpenAI and expenditure
... continue reading