OpenAI and Anthropic are racing toward potentially record-breaking IPOs by the end of the year. An inside look at the financials of both companies prior to funding rounds completed earlier this year shows their Achilles’ heel: the soaring costs needed to train new AI models. OpenAI expects to spend $121 billion on computing power for AI research in 2028. That means the company anticipates burning $85 billion that year even after almost doubling sales from the prior year. Such losses would dwarf that of virtually any other public company in history. Anthropic doesn’t expect to spend nearly as much, but its rosiest forecasts tell a similar story of mounting computing costs. Both companies are releasing new versions of their AI models at a faster cadence than ever before, while pouring more resources into the training runs that create them. The arms race is showing no signs of slowing.

Full analysis : OpenAI and Anthropic have projected profitability to investors with and without training costs, and report inference costs exceeding half of their revenue.