OpenAI CEO Sam Altman said on Friday that the company plans to keep focusing on growth and investing in training and computing power, even if that means it won’t be profitable for a while. In an interview with CNBC following the launch of GPT-5, he explained that the Microsoft-backed (MSFT) AI firm is still improving its models quickly, so it makes sense to keep spending during this phase. Altman believes it’s worth running at a loss as long as the AI keeps getting significantly better.
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Last year, OpenAI expected to make $3.7 billion in revenue but also projected about $5 billion in losses. Now, the company is on track to reach over $20 billion in yearly recurring revenue, but it’s still losing money. GPT-5, its newest and most advanced model, was released on Thursday and is now available to all ChatGPT users, including those on the free plan. OpenAI says that this version is smarter, faster, and more useful, especially for tasks like writing, coding, and healthcare.
OpenAI also introduced two new open-weight models earlier this week, which are more affordable and flexible for developers and businesses to customize. Even though building these models is expensive, investors are still confident in OpenAI’s future. In fact, the company is in talks for a new round of funding that could value it at around $500 billion, which may be led by Thrive Capital. Altman said that OpenAI could choose to be profitable sooner if it wanted to, but for now, staying private gives it the freedom to keep investing heavily.
Is MSFT Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys and one Hold assigned in the last three months. In addition, the average MSFT price target of $623.25 per share implies 19.5% upside potential.
