Altman's reaction to OpenAI's billion-dollar loss: "Enough"

OpenAI made a loss of approximately 12 billion US dollars in the past quarter. This is according to Microsoft's financial figures. Sam Altman and Microsoft CEO Satya Nadella discussed business in a podcast. Altman was somewhat reticent and immediately went on the offensive. In the previous acts of the play “OpenAI and the Economy,” the focus was already on investors, a restructuring, and circular business with other companies.

Podcast host Brad Gerstner confronted Altman with the fact that OpenAI earns about 13 billion US dollars annually but has already contractually committed a trillion in expenses for various infrastructure projects. The response: “First of all, we are generating far higher revenues.” However, Altman does not explain how they are doing this. “Secondly, Brad, if you want to sell your shares, I'll find a buyer for you.”

“I just… enough,” so something like “I have… enough,” says Altman amidst Nadella's continued laughter. He repeats that there are many people who would like to buy shares. Apparently, he means that people who are concerned about OpenAI's finances are mistaken. He admitted that OpenAI could still mess up—but only if they don't get enough access to computing resources. Revenues, Altman says, will increase. No one would dispute that, the only question is whether it will be enough to recoup the many billions.

Altman also reveals that OpenAI is not just to remain an AI provider, but also to become an important AI cloud provider for customers. However, OpenAI is not planning an IPO in the near future. For that, Altman believes, revenues could perhaps be increased to 100 billion US dollars by 2027. How exactly remains open at this point as well. But we know that OpenAI is developing hardware, for example. The plans to become an infrastructure provider themselves could also contribute significantly to this. Amazon, for instance, has long earned the bulk of its money with Amazon Web Services, the company's cloud division. Furthermore, OpenAI has just announced that it will charge more for the use of its video service, Sora. Sora chief Bill Peebles writes on X that in the future, more videos can be generated and edited for a fee. Since the previous model is economically unsustainable, fewer videos will apparently be free in the future.

New shareholding structure of Microsoft

Basically, the podcast is about the restructuring of OpenAI into a superordinate foundation and the profit-oriented company operating beneath it. The plans caused disputes between OpenAI and Microsoft for a while; there was a whole alliance of other foundations, but also Mark Zuckerberg and Elon Musk beforehand who were against it. This was mainly about Microsoft's shares as a very early major investor in OpenAI. Nadella praises OpenAI's business acumen and restructuring. He is proud to be part of the foundation, which, with 130 billion US dollars in capital, is already one of the largest in the world. OpenAI recognized the opportunities of AI early on.

When presenting Microsoft's quarterly figures, it became apparent, in addition to OpenAI's losses, that Microsoft's shares have become smaller with the restructuring. The Wall Street Journal calculates that Microsoft had 32.5 percent of shares before the change, resulting in a loss of over 12 billion. Now Microsoft owns 27.5 percent of shares, which corresponds to a loss of 11.5 billion US dollars.

(emw)