Just a few weeks ago, we wrote about how OpenAI became the $500 billion hub of the AI ecosystem — the company at the center of everything, and potentially the industry’s single point of failure. Now, fresh filings from Microsoft have revealed just how deep the financial hole runs: OpenAI reportedly lost $11.5 billion last quarter.

The number comes straight from Microsoft’s latest earnings report filed with the U.S. Securities and Exchange Commission (SEC). As first spotted by The Register, the document includes multiple references that point to massive losses from Microsoft’s investment in OpenAI.

In PART 1, Item 2 of the SEC filing, Microsoft said: “Current year net income and diluted EPS were negatively impacted by net losses from investments in OpenAI.”

Then, on page 9 of the SEC filing, Microsoft disclosed:

“We have an investment in OpenAI Global, LLC (‘OpenAI’) and have made total funding commitments of $13 billion, of which $11.6 billion has been funded as of September 30, 2025. The investment is accounted for under the equity method of accounting, with our share of OpenAI’s income or loss recognized in other income (expense), net.”

OpenAI Lost $11.5 Billion Last Quarter, Microsoft’s SEC Filing Shows

That line — “our share of OpenAI’s income or loss” — carries weight. Microsoft isn’t marking OpenAI’s value based on market estimates; it’s reporting actual profits and losses. Under equity accounting, Microsoft’s share of OpenAI’s financial results directly impacts its own income statement, meaning OpenAI’s losses flow straight into Microsoft’s books.

Later, on page 33, another revealing passage appears:

“Current year net income and diluted EPS were negatively impacted by net losses from investments in OpenAI, which resulted in a decrease in net income and diluted EPS of $3.1 billion and $0.41, respectively. Prior year net income and diluted EPS were negatively impacted by net losses from investments in OpenAI, which resulted in a decrease in net income and diluted EPS of $523 million and $0.07, respectively.”

That difference — from $523 million to $3.1 billion — tells the story. Microsoft’s stake in OpenAI grew to 27 percent earlier this year when the AI company finalized its transition into a for-profit entity. If Microsoft’s filings show a $3.1 billion hit representing its 27 percent share, that implies OpenAI lost about $11.5 billion during the quarter.

Microsoft confirmed the $3.1 billion loss reflected its current fiscal year, which began July 1. That means these numbers represent a single quarter, not a year-to-date total.

For context, OpenAI reportedly generated about $4.3 billion in revenue during the first half of the year. That makes an $11.5 billion loss all the more staggering — a reminder of how capital-intensive the AI arms race has become. The figure won’t make much of a dent for Microsoft, which earned $27.7 billion in net income last quarter alone. But it does highlight how much Big Tech is propping up this new era of AI development, burning through billions in the process.

It’s easy to forget that behind the hype, these models don’t just run on GPUs — they run on money. Lots of it.

The $11.6 billion funding figure in Microsoft’s filing also appears to be new, confirming how much of its $13 billion commitment has already been deployed. OpenAI, for its part, didn’t respond to a request for comment. But if this report turns out to be off base, we’ll no doubt hear from them soon enough.

Why OpenAI Is Losing Money

OpenAI’s cash burn isn’t new. Back in January, CEO Sam Altman admitted the company was losing money on its $200-per-month ChatGPT Pro subscription. The plan proved far more popular than expected, driving usage that outpaced revenue and swelling the company’s operational costs. That candid admission echoed earlier reports that OpenAI was on track to lose as much as $5 billion in 2024—a burn rate that could drain its reserves within a year if left unchecked.

The financial strain runs deep. The Information reported that OpenAI’s annual costs for AI training and inference could reach $7 billion this year, with another $1.5 billion tied to staffing. To ease the pressure, the company is reportedly seeking $7 billion from international investors, including backers in the UAE. The capital would fund hardware and infrastructure expansion to support its scale.

Despite the staggering losses, OpenAI is projecting a steep revenue climb—$12.7 billion this year, $29.4 billion in 2026, and $100 billion by 2029. Those numbers would put it in the league of consumer giants like Nestlé and Target. The demand is there: in June, OpenAI’s services hit 350 million monthly users, up from 100 million just three months earlier.

Founded in 2015 by Sam Altman and Elon Musk as a nonprofit, OpenAI transitioned to a commercial model in 2020. That shift, paired with the explosive success of ChatGPT, pushed it to the center of the AI boom. The challenge now is sustaining that momentum while facing the reality that building artificial intelligence at scale comes with a staggering price tag.

For now, the takeaway is clear: the AI boom is still in full swing, fueled by Big Tech’s willingness to absorb enormous losses — at least until the bubble pops.