This question can be asked about several "unicorns" that need huge inputs of capital to keep going. Only the era of zero interest rates made them work.
WeWork went bankrupt. Uber briefly made money but is losing it again, and is nowhere near paying back its investors. Tesla has become a major luxury car company, and is somewhat profitable, but the stock is way overpriced for a car company. Everybody now makes electric cars, so this is a low-margin business. (Reuters: "Tesla's bleak margins sink shares as Musk hypes everything but cars.")
OpenAI, as a business, is assuming both that LLM-type AI will get much better very fast, and that everybody else won't be able to do what they do. It's unlikely that both of those assumptions hold. Look at autonomous vehicles. First tech demos (CMU) in the 1980s. First reasonably decent demos (DARPA Grand Challenge) in the 2000s. First successful deployment in the 2020s (Waymo, maybe Cruise and Zoox). Still not profitable. 40 years from first demos to deployment, probably 50 to profitability. It's entirely possible that OpenAI's business will look like that. Their burn rate is way too high to sustain for that long.
Often it takes that long, even when the basics have been figured out. Xerography was first demoed in the late 1930s. The demo machine used to be in the lobby at Xerox PARC. Profitability came in the 1960s. By the late 1970s, everybody had the technology, and it was low-margin. Electronic digital computing goes back to IBM's 1940s pre-WWII electronic multiplier experiments, but didn't come down from insanely expensive price levels until the 1980s. Memory was a million dollars a megabyte as late as the mid-1970s. Color television was first demoed in 1928, and the first color CRT was developed in the 1940s. But mainstream adoption didn't come until 1966-1967.
WeWork went bankrupt. Uber briefly made money but is losing it again, and is nowhere near paying back its investors. Tesla has become a major luxury car company, and is somewhat profitable, but the stock is way overpriced for a car company. Everybody now makes electric cars, so this is a low-margin business. (Reuters: "Tesla's bleak margins sink shares as Musk hypes everything but cars.")
OpenAI, as a business, is assuming both that LLM-type AI will get much better very fast, and that everybody else won't be able to do what they do. It's unlikely that both of those assumptions hold. Look at autonomous vehicles. First tech demos (CMU) in the 1980s. First reasonably decent demos (DARPA Grand Challenge) in the 2000s. First successful deployment in the 2020s (Waymo, maybe Cruise and Zoox). Still not profitable. 40 years from first demos to deployment, probably 50 to profitability. It's entirely possible that OpenAI's business will look like that. Their burn rate is way too high to sustain for that long.
Often it takes that long, even when the basics have been figured out. Xerography was first demoed in the late 1930s. The demo machine used to be in the lobby at Xerox PARC. Profitability came in the 1960s. By the late 1970s, everybody had the technology, and it was low-margin. Electronic digital computing goes back to IBM's 1940s pre-WWII electronic multiplier experiments, but didn't come down from insanely expensive price levels until the 1980s. Memory was a million dollars a megabyte as late as the mid-1970s. Color television was first demoed in 1928, and the first color CRT was developed in the 1940s. But mainstream adoption didn't come until 1966-1967.