Who profits from AI? Not OpenAI, says think tank

New research from Epoch AI suggests any revenue surplus from one model ‘gets outweighed’ by the expense of developing the next.

Findings from a new study by Epoch AI, a non-profit research institute, appear to poke major holes in the notion that AI firms, and specifically OpenAI, will eventually become profitable.

The research paper written by Jaime Sevilla, Hannah Petrovic and Anson Ho, suggests that while running an AI model may generate enough revenue to cover its own operating costs, any profit is outweighed by the cost of developing the next big model. So, it said, “despite making money on each model, companies can lose money each year.”

The paper seeks to answer three questions: How profitable is running AI models? Are models profitable over their lifecycle? Will AI models become profitable?

To answer question one, researchers created a case study they called the GPT-5 bundle, which they said included all of OpenAI’s offerings available during GPT-5’s lifetime as the flagship model, including GPT-5 and GPT-5.1, GPT-4o, ChatGPT, and the API, and estimated the revenue from and costs of running the bundle. All numbers gathered were based on sources of information that included claims by OpenAI and its staff, and reporting by media outlets, primarily The Information, CNBC, and the Wall Street Journal.

The revenue estimate, they said, “is relatively straightforward”. Since the bundle included all of OpenAI’s models, it was the company’s total revenue over GPT-5’s lifetime from August to December last year: $6.1 billion.

And, they pointed out, “at first glance, $6.1 billion sounds healthy, until you juxtapose it with the costs of running the GPT-5 bundle.” These costs come from four main sources, the report said, the first of which is inference compute at a cost of $3.2 billion. That number is based on public estimates of OpenAI’s total inference compute spend in 2025, and assumes that the allocation of compute during GPT-5’s tenure was proportional to the fraction of the year’s revenue generated in that period.

Who profits from AI