‘Money down a black hole’: The alarm bells are ringing at $1.2 trillion giant

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In the San Francisco offices of OpenAI, staff are preparing to celebrate a historic milestone.

At some point in the coming months, ChatGPT, the company’s AI bot, will join a select group of apps to boast more than one billion users.

It will have done so faster than any other consumer product in history. It took Facebook eight years to get there and TikTok – the fastest-growing to date – slightly more than five.

ChatGPT will take around three-and-a-half years.

Since its release in late 2022, OpenAI has become one of the world’s most valuable startups, raising tens of billions of dollars and making Sam Altman, its chief executive, one of Silicon Valley’s most prominent figures.

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Stephen BartholomeuszSenior business columnist

Senior business columnist

But even as it breaks records, OpenAI is facing questions about whether the vast sums investors have ploughed into the company will ever be repaid.

Some have even speculated that the poster child of the AI boom could run out of cash and potentially bring down much of the US tech sector with it.

OpenAI, founded 11 years ago, has simultaneously become one of the most valuable and loss-making companies in history.

The business has been valued at $US850 billion ($1.2 trillion), bigger than all but 10 companies on the US stock market.

Separately, it has told investors that it plans to burn through $US115 billion by 2029 – almost four times the record-breaking $US31.5 billion Uber lost before making its first profit.

Sky-high salaries for researchers and the extraordinary cost of running its energy-hungry AI systems have led to questions over whether the company can ever justify that investment.

In the past, Altman has outlined plans to spend $US1.4 trillion on data centres to power its technology.

This led Sebastian Mallaby, the economist and writer, to suggest earlier this year that the company could run out of cash.

“My bet is that over the next 18 months, OpenAI runs out of........

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