Rising Compute Costs Cast Shadow Over OpenAI’s Growth Story – HSBC
HSBC warns that OpenAI’s massive appetite for computing power could delay profitability far beyond the current decade.
Quick overview
- HSBC warns that OpenAI may not achieve profitability until at least 2030 due to rising infrastructure and computing costs.
- The bank estimates OpenAI will require an additional $207 billion in funding to support its growth.
- HSBC projects that compute-related expenses could reach $1.4 trillion by 2033, highlighting the capital-intensive nature of AI development.
- The report indicates that profitability in the broader AI ecosystem may take longer than investors anticipate, despite the sector's potential.
HSBC warns that OpenAI’s massive appetite for computing power could delay profitability far beyond the current decade.
HSBC Projects Prolonged Losses For OpenAI
In a new assessment, HSBC suggests that OpenAI may not become profitable until at least 2030, as the company faces a steep and ongoing rise in infrastructure and computing expenses. While demand for advanced AI services continues to grow at an exceptional pace, the financial burden of sustaining that growth presents a major challenge.
The bank estimates OpenAI will need an additional $207 billion in funding as it continues to scale its computing footprint. Although revenue could exceed $213 billion by the end of the decade, HSBC believes infrastructure investments will consume a significant portion of that growth, keeping margins under pressure for years to come.
Compute Costs Could Reach Trillion-Dollar Levels
Looking ahead, HSBC projects that OpenAI’s compute-related commitments could swell to as much as $1.4 trillion by 2033. Between now and 2030 alone, analysts model roughly $792 billion in cloud and AI infrastructure spending, with data center rentals making up around $620 billion of that figure.
These numbers highlight just how capital-intensive frontier AI development has become, even for the most advanced and well-funded players in the industry.
A Warning Sign For The Wider AI Ecosystem
According to the HSBC research team, led by Nicolas Cote-Colisson, the path forward is marked by soaring costs, intensifying competition, and an increasingly crowded landscape. The report suggests that profitability across the AI ecosystem may take far longer than many investors currently expect, reinforcing a cautious outlook despite the sector’s enormous long-term potential.
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