Especially in outlining its AI Infrastructure investments ahead of revenues and optimal margins. Especially now that Elon Musk’s SpaceX mega-AI IPO has set the upwards public market momentum amongst investors. In particular, I said:
“In an environment where investors are leaning into AI infrastructure spend ahead of demand — and you can see that tolerance in SpaceX’s post-IPO run — OpenAI’s posture is essentially: the market seems fine with it, so throw in the kitchen sink and keep stepping on the gas, both for the business and relative to Anthropic. Highlighting the spend now is thus a marketing strategy as much as anything — and continued prep of investor expectations ahead of the next IPO steps, especially given SpaceX’s success last week.”
“OpenAI burned $3.7 billion in Q1 2026, over half its $5.7 billion revenue.”
“Company faces $665 billion in computing spending commitments through 2030.”
“OpenAI reported 39% gross margins in Q1, up from 33% year-over-year.”
“OpenAI burned through $3.7 billion in the first quarter, more than half its $5.7 billion in revenue, according to documents the company shared with shareholders. Both cash burn and revenue tripled from the same period the previous year, signaling how even with strong AI demand, making money from AI continues to be challenging.”
The company has been topping up in the private markets ahead of its anticipated public debut.
“The company ended the quarter with more than $73 billion in cash and marketable securities, compared with $40 billion at the end of December, reflecting the company’s massive funding round announced at the end of March. Assuming the cash burn remains around the first quarter level, OpenAI won’t need to raise more money in the near term. That could relieve the pressure on OpenAI to go public sooner rather than later.”
“It’s possible, however, that cash burn fluctuates quarterly: the company had projected it would burn $25 billion this year and $57 billion next year, The Information has reported.”
“OpenAI said last week it had filed confidentially to go public, although the company has also indicated it may take its time proceeding to an IPO once its paperwork has been cleared by regulators.”
“Still, the company’s lack of profitability is likely to be closely scrutinized by investors ahead of an IPO.”
You don’t say. But there’s more leeway here for now than there was even a few months ago.
“Another issue that investors will likely focus on is OpenAI’s commitments to spend money on computing capacity at cloud firms for running and training its AI. The company told shareholders that it had an estimated $665 billion in spending commitments at the end of 2025, stretching out through 2030. Those spending commitments largely aren’t reflected on its balance sheet.”
“Overall, OpenAI reported a net loss of more than $21.3 billion in the first quarter, but that was skewed by an accounting charge of nearly $12.4 billion, reflecting a change in fair value on convertible interest rights and warrant liability, related to equity issued to investors and the creation of the OpenAI foundation.”
It’s all going to make for serious, sobering reading when the confidentail S-1 IPO filings are made public.
“The company’s first quarter operating loss was $9.3 billion, which included more than $2.3 billion in share based compensation expense for employees. Share-based compensation was more than double the expense for the year-earlier period.”
“The financial statements showed that OpenAI’s cost of revenue, which is largely made up of the cost of serving the models, was $3.5 billion. That meant OpenAI had gross margins of 39%, up from 33% a year earlier, suggesting that the business is becoming slightly more efficient as it grows.”
All par for the current course. Note that Anthropic’s numbers as and when they’re made more clear, will likely show aggressive AI Infrastructure ramps as well, although relatively higher margins given their singular enterprise and AI Coding focus.
For now, these dynamics are developing this AI Tech Wave, with a lot of moving parts. Particularly in the context of Anthropic’s ‘The Blip 2.0’, however long that lasts. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
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