OpenAI lost 38.5 billion in 2025 and filed for IPO anyway

Ed Zitron got his hands on OpenAI’s audited 2025 financial statements. The Financial Times independently confirmed the numbers. What they show is a company burning cash at a rate that makes the dot-com era look restrained.

OpenAI spent $34 billion in 2025. Revenue was $13.07 billion. The net loss came in at $38.53 billion, nearly eight times the $5.09 billion lost in 2024. The operating loss hit $20.92 billion.

Those are the headline figures. The breakdown underneath is where it gets interesting.

R&D ate $19.18 billion, up from $7.81 billion the year before. Of that, $10.59 billion went straight to Microsoft for training compute. Cost of revenue (inference, hosting) was $7.5 billion, up from $2.65 billion. Sales and marketing tripled to $5.73 billion from $1.11 billion.

Every major cost line grew faster than revenue. Revenue itself tripled year over year, which sounds impressive until you notice that spending nearly tripled too, from about $11.6 billion to $34 billion. The company is running faster and falling further behind.

The $38.5 billion net loss includes roughly $30 billion in non-cash charges tied to OpenAI’s conversion from a nonprofit to a for-profit entity. Under US accounting rules, the convertible interests that existing stakeholders received got booked as liabilities. Strip those out and the adjusted loss is closer to $8 billion. Which is still enormous for a company with $13 billion in revenue.

Then there is the Microsoft relationship. OpenAI paid Microsoft $17.2 billion in 2025. Microsoft paid OpenAI $303 million. That asymmetry tells you who holds the power in that arrangement. More than half of OpenAI’s R&D budget, and by extension more than half of its total cost structure, flows directly to a single infrastructure provider. If Microsoft decides to raise Azure rates, OpenAI has no meaningful alternative. There is no multi-cloud story here.

Q1 2026 data surfaced separately via The Information. OpenAI generated $5.7 billion in revenue while burning $3.7 billion in cash. Annualized, that puts OpenAI on track for roughly $23 billion in 2026 revenue. Also on track for another year of multi-billion dollar operating losses.

All of this lands weeks after OpenAI confidentially filed its S-1 for an IPO that could value the company at up to $1 trillion. In March 2026, OpenAI raised $122 billion at an $852 billion valuation. The IPO market seems unbothered by the losses. SpaceX is not profitable either and just pulled off the largest IPO in history. We are apparently in a market where theoretical future profit carries more weight than documented present losses.

The competitive pressure is intensifying from the wrong direction. Anthropic overtook OpenAI in US business adoption for the first time in May, according to the Ramp AI Index. Its Claude Code platform has been winning over enterprise developers. A report from last week said OpenAI is weighing aggressive price cuts to fight back. A price war when you are already losing $20 billion a year on operations is a bold strategic choice.

Enterprise customers are also starting to push back on token-based pricing and demand measurable returns on their AI spending. OpenAI projects $2.5 billion in advertising revenue for 2026, scaling to $100 billion by 2030. The company tells investors it hopes to be profitable by 2030. That is a lot of hope baked into a lot of projections.

ChatGPT has over 900 million weekly active users. About 50 million of them pay. Free-to-paid conversion below 6 percent is a precarious foundation for a trillion-dollar valuation. The company has already shut down Sora, its video generation model, in March. Its applications chief told employees to stop going on side quests and focus on core coding and business tools. The message internally is the same one the financials say externally: narrow the scope, slow the bleed.

OpenAI’s own forecast, per a January report from The Information, projected a $14 billion loss in 2026. That was before the Anthropic price pressure escalated. The company also reportedly expects to lose $44 billion cumulatively from 2023 through 2028, before turning a $14 billion profit in 2029. Those projections now have fresh audited data working against them.