OpenAI’s $350 Billion Computing Cost Problem

The most popular consumer internet services usually figure out how to make money even after a decade or more of losses. Amazon, Uber, Netflix and Snap all started generating cash by raising prices or leveraging their large audiences to sell ads or other services.

OpenAI’s growing audience would seem to put it in a similar position. Its three-year-old ChatGPT business is closing in on 1 billion users and $10 billion in subscription revenue from millions of customers just this year. But as investors buy OpenAI shares at an implied $500 billion valuation, up 17 times from three years ago, they are taking a risk that is as unprecedented as OpenAI’s costs.