Here's a concerning math problem: The companies building the infrastructure for OpenAI have borrowed $96 billion. OpenAI expects to bring in $20 billion in revenue this year. You don't need an MBA to see the numbers aren't adding up.
The AI industry is running on borrowed money, and the pile keeps getting bigger. Companies supplying OpenAI with data centers, chips, and processing power are taking on massive debt to fund operations that still haven't proven they can generate enough revenue to cover costs.
The Staggering Numbers
OpenAI has pledged $1.4 trillion to secure the energy and computing power it needs for future operations. That's trillion with a T. Meanwhile, it's projecting just $20 billion in revenues this year, according to The Financial Times.
A recent HSBC study paints an even bleaker picture: even if OpenAI's revenues somehow rocket to $200 billion by 2030, the company would still require an additional $207 billion in funding just to stay afloat.
The suppliers themselves are deep in the red. OpenAI's partners including SoftBank, Oracle (ORCL), and CoreWeave have already borrowed $30 billion. Blue Owl Capital and Crusoe have taken out $28 billion in loans, with another $38 billion currently under negotiation with Oracle and Vantage and their respective banks.
A Fundamental Shift in Financing
This wasn't always how AI got funded. Until recently, most AI infrastructure was financed with cold hard cash straight from the balance sheets of tech giants like Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Meta (META).
But even those giants are changing their approach. The big five hyperscalers—Amazon, Google, Meta, Microsoft, and Oracle—have accumulated $121 billion in new debt this year alone to fund AI operations, according to Bank of America. That's over four times the average debt these companies issued over the past five years.
When the companies with the deepest pockets in tech start borrowing heavily instead of paying cash, it tells you something about how expensive this AI buildout has become. And how uncertain everyone is about when it'll actually pay off.
