Skip to content 
Every now and then, a number lands in the public domain that changes how an entire industry is perceived.
Last week, that number was $39 billion.
That is how much money OpenAI reportedly lost in 2025, according to audited financial figures first shared by independent journalist Ed Zitron and then confirmed by the Financial Times. And given that OpenAI has just confidentially filed for an IPO, the timing could not be more uncomfortable.
Let us break down what is going on.
The Numbers, First
OpenAI brought in roughly $13 billion in revenue last year. By the end of 2025, it was clocking $2 billion per month, double what it was generating a year earlier. That is genuinely extraordinary growth.
But here is the catch: it spent $34 billion to get there.
About $19 billion went into research and development. Nearly $6 billion more on sales, marketing, and other operating costs. The result was a net loss that ballooned from $5 billion in 2024 to $39 billion in 2025.
That sounds catastrophic. But the story is a little more nuanced.
The Accounting Quirk That Inflates the Number
The $39 billion loss sounds alarming. But here’s the catch — roughly $30 billion of it wasn’t cash that actually left the business. It was largely an accounting loss on paper, not money flowing out of the company’s bank account.
Here is why. Before OpenAI converted into a public benefit corporation late last year, its investors held something called convertible interest rights instead of regular equity. Under US accounting rules, these were treated as liabilities on the balance sheet and had to be revalued every quarter as the company’s valuation went up.
OpenAI’s valuation did go up. A lot. And each time it did, the increased value of those investor rights had to be booked as a charge on the income statement.
That created a one-time, non-cash hit of around $30 billion. It will not repeat.
Strip that out, along with stock-based compensation and computing credits from Microsoft, and OpenAI’s underlying operating loss was closer to $8 billion. Still large, but a very different story from $39 billion.
Why This Still Matters for the IPO
Even at $8 billion in annual losses, OpenAI is burning serious cash.
The company spent $34 billion to generate $13 billion in revenue last year. That is a cost base more than twice the size of its top line. And while revenue is growing fast, the costs of running frontier AI, buying compute, funding data centres, and retaining researchers, are not going to shrink anytime soon.
The IPO market will now have to decide what this is worth.
OpenAI has reportedly targeted a valuation of over $1 trillion for its stock market debut, potentially as early as this autumn. For context, it last raised money at $730 billion (pre-money) in a $122 billion funding round earlier this year.
Anthropic, which filed its own IPO paperwork around the same time, is valued at $965 billion. So both companies could be heading to public markets around the same time, competing for the same pool of investors.
The Market Share Wrinkle
There is one more piece of this puzzle that investors will be watching.
ChatGPT’s market share has slipped below 50% for the first time, according to Sensor Tower’s State of AI 2026 report. As of May 31, it stood at 46.4%, an all-time low. Anthropic’s Claude has been gaining ground.
Some of the shift was attributed to OpenAI’s deal with the Pentagon, which alienated a portion of its user base. Sam Altman himself later acknowledged the deal “looked opportunistic and sloppy.” OpenAI also shut down Sora and introduced ads, moves that did not go down well with users.
None of this is necessarily fatal. ChatGPT is still the most-used AI chatbot in the world by a significant margin. But for a company hoping to command a trillion-dollar valuation, every percentage point of market share erosion is a data point that prospective investors will scrutinise.
The Bottom Line
OpenAI is one of the fastest-growing businesses in history. It went from $1 billion in quarterly revenue to $2 billion in monthly revenue in a single year. That kind of trajectory does not come along often.
But it is also spending at a scale that would make most CFOs reach for a paper bag. And now that its financials are partly in public view, the pressure is on to show that the losses are narrowing, the market share is holding, and the $1 trillion price tag is justified.
The IPO will be the ultimate test.
Whether the market agrees or not is a story for later this year.
