The artificial intelligence industry has become a high-stakes poker game where billions of dollars are pushed to the center of the table with each passing quarter. Companies are betting that their massive investments in AI infrastructure and development will eventually pay off, but for OpenAI, the house might be running out of chips.
Sebastian Mallaby, a senior fellow at the Council on Foreign Relations, has made a striking prediction in a new essay for the New York Times: OpenAI could run out of money within the next year and a half.
That’s a sobering forecast for the company that kickstarted the generative AI revolution with ChatGPT just over three years ago.
The math behind Mallaby’s warning is straightforward. OpenAI burned through more than $8 billion in 2025 alone, all while struggling to convert ChatGPT’s viral popularity into sustainable revenue.
The company has committed to spending well over $1 trillion before the decade ends, an astronomical figure that would make even the most optimistic venture capitalists raise their eyebrows.
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What makes OpenAI’s position particularly precarious is the competition it faces. Google, Meta, and Microsoft all have profitable legacy businesses generating steady cash flow that they can funnel into AI development.
They can afford to play the long game, treating AI as a strategic investment rather than a do-or-die proposition.
OpenAI doesn’t have that safety net. The company’s entire existence depends on convincing investors that scale will eventually translate to profitability.
But so far, users have shown remarkably little willingness to pay for ChatGPT subscriptions, and the company has only recently begun exploring alternative revenue streams.
“However rich the eventual AI prize, the capital markets seem unlikely to deliver,” Mallaby wrote, suggesting that even record-breaking fundraising rounds won’t be enough to keep OpenAI afloat at its current burn rate.
The irony is that Mallaby isn’t even an AI skeptic. He’s actually quite bullish on artificial intelligence as a technology, noting that the industry has made “striking” progress in just three years, a pace of innovation that typically takes decades in other sectors. His prediction about OpenAI isn’t a bet against AI itself, but rather a calculation about which companies are positioned to survive the expensive race to dominance.
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If OpenAI does run out of money, Mallaby expects the company will be “absorbed by Microsoft, Amazon or another cash-rich behemoth.” That would be a remarkable fall from grace for a company that, despite being privately held, has raised record amounts of funding and achieved household-name recognition.
The comparison to WeWork keeps coming up. One venture capital executive invested in an OpenAI rival told The Economist that “this is the WeWork story on steroids.”
The coworking company famously imploded in 2023 after years of burning through billions on real estate leases, collapsing when investors finally lost faith in its path to profitability.
Many industry experts have flagged 2026 as make-or-break for OpenAI. The pressure is mounting from all sides: competitors are catching up technologically, investors are getting anxious about returns, and the company’s revenue still lags far behind its expenses.
Sam Altman, OpenAI’s CEO, isn’t backing down. He’s declared “code red” and doubled down on improving ChatGPT to fend off competition, particularly from Google. But declarations of urgency don’t pay the bills, and even Altman’s characteristic optimism can’t change the fundamental economics at play.
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Even if OpenAI doesn’t make it, Mallaby argues the company will leave an important legacy. “An OpenAI failure wouldn’t be an indictment of AI,” he wrote. “It would be merely the end of the most hype-driven builder of it.”
That’s perhaps the most important takeaway from this unfolding drama. The AI revolution will continue with or without OpenAI. Google, Microsoft, Meta, and others have the resources and business models to sustain their AI investments through lean years.
They can afford to wait for the technology to mature and for practical applications to emerge that justify the enormous expenditures.
OpenAI pioneered consumer AI and captured the world’s imagination, but capturing market share and generating sustainable profits are entirely different challenges. The next 18 months will reveal whether the ChatGPT creator can bridge that gap, or become a cautionary tale about the dangers of hype without revenue.
