HSBC analysts project that OpenAI, the developer behind ChatGPT, could encounter a substantial $207 billion funding deficit to support its extensive artificial intelligence infrastructure build-out. The analysis, published in October 2023 and reported by the Financial Times, characterizes OpenAI as an "insanely capital-intensive compute utility." This assessment underscores the immense financial demands of developing and scaling advanced AI technologies in a rapidly evolving competitive landscape.
The report details OpenAI's significant reliance on cloud power, estimating that the company rents up to 36 gigawatts (GW) from major providers like Microsoft and Amazon. These colossal infrastructure needs translate into data-center commitments that could approach $1.8 trillion over time, highlighting the unprecedented scale of investment required for cutting-edge AI development. Such figures illustrate the unique financial model underpinning leading AI research firms.
Even under highly optimistic assumptions regarding user expansion and revenue generation, OpenAI is still expected to face a considerable funding challenge. Analysts modeled for 3 billion users by 2030, alongside substantial income from subscriptions and advertising, yet the projected $207 billion gap persists. This suggests that even rapid growth and diverse revenue streams may not fully offset the escalating costs of AI development.
Despite the specific financial hurdles identified for OpenAI, HSBC maintains an "ultra-bullish" outlook on the broader AI sector. The bank argues that even a few extra basis points of global productivity growth, driven by AI advancements, could easily justify the current "unreasonable" capital expenditure across the industry. This perspective indicates a belief in AI's transformative economic potential, despite the high upfront investment costs.
The analysis emphasizes the intense competition within the AI space, which further drives the need for continuous, massive investment in computing power and research. The findings from HSBC provide a critical look into the financial realities and long-term capital requirements for companies at the forefront of the artificial intelligence revolution.