OpenAI profit margins just doubled. According to The Information, the company’s “compute margin” reached 70% as of October, up from 52% at the end of 2024 and double where it was in January 2024.
That sounds like good news, but there’s a catch: OpenAI still isn’t profitable. They’re burning through cash faster than they’re making it, even as they race toward $20 billion in annual revenue.
The quick answer: OpenAI is getting better at making money from ChatGPT’s paid tiers, especially business customers. Their margins improved from 35% to 70% in under two years. But the company still isn’t profitable because of massive infrastructure costs. They’re also in talks to raise another $10 billion from Amazon.
What Are OpenAI Profit Margins and Why Do They Matter?
First, let’s translate the jargon. “Compute margin” is an internal OpenAI metric that measures what percentage of revenue remains after paying for the computing power to run their AI models.
Think of it this way: when you pay $20/month for ChatGPT Plus, OpenAI has to pay for the servers that process your requests. If their compute margin is 70%, they keep $14 and spend $6 on computing costs.
According to The Information, here’s how OpenAI’s margins have improved:
January 2024: ~35% compute margin
December 2024: 52% compute margin
October 2025: 70% compute margin
That’s a significant improvement. OpenAI is getting more efficient at running their models, which means more of your subscription money goes toward profit rather than server costs.
Why OpenAI Still Isn’t Profitable
Better margins sound great, but they don’t tell the whole story.
Compute costs are just one expense. OpenAI also pays for:
Research and development: Building new models like GPT-5.2 costs billions.
Talent: AI researchers command salaries in the millions. OpenAI competes with Google, Anthropic, and Meta for the same small pool of experts.
Infrastructure: The company has “audacious infrastructure plans” that require massive capital investment.
Free users: Most people use ChatGPT’s free version. Those users still cost money to serve, but they don’t generate direct revenue.
Sam Altman has said the company expects $20 billion in run-rate revenue by the end of 2025 and wants to reach “hundreds of billions” by 2030. But right now, expenses outpace income.
The Push for Business Customers
Here’s where the margin story gets interesting for you.
OpenAI is aggressively pushing its enterprise and business products. The ChatGPT Enterprise tier costs significantly more than consumer subscriptions and comes with features businesses need: better security, admin controls, and priority access.
Business customers are more valuable because:
Higher prices: Enterprise plans cost more per user than consumer plans.
Predictable usage: Business use is more consistent, making capacity planning easier.
Stickier customers: Once a company integrates ChatGPT into their workflow, switching costs are high.
The Information reported that OpenAI now has better compute margins than Anthropic for paid accounts, though Anthropic has better overall server efficiency.
What This Means for You
If you’re a ChatGPT user, here’s what these margin improvements might mean:
Free tier probably isn’t going away. OpenAI needs free users to maintain market dominance and feed their training data pipeline. But expect more features to move behind the paywall.
Paid tiers might get better value. As margins improve, OpenAI has more room to add features to justify subscription costs. The recent GPT Image 1.5 upgrade is an example.
Prices probably won’t drop. Even with better margins, OpenAI is still losing money. Don’t expect subscription discounts anytime soon.
Business features will keep improving. Enterprise is where the money is. Expect OpenAI to keep investing in features that matter to corporate customers.
The Amazon Deal on the Horizon
OpenAI is also in early talks to raise at least $10 billion from Amazon and use its chips. This deal could value the company at over $500 billion.
For context, OpenAI was valued at $157 billion just a year ago. The potential Amazon deal would more than triple that valuation.
Amazon’s cloud computing arm (AWS) would give OpenAI access to more infrastructure. Amazon’s custom AI chips could help OpenAI further reduce computing costs, improving those margins even more.
The Honest Take
OpenAI’s margin improvement is genuinely impressive. Doubling your efficiency in under two years while running some of the most complex AI systems on the planet is no small feat.
But let’s be realistic: 70% margins on compute don’t mean 70% profit. The company is still burning cash and raising billions to stay afloat.
For investors worried about an AI bubble, this is mixed news. Yes, the economics are improving. No, OpenAI isn’t profitable yet. The gap between “better margins” and “actual profit” is still measured in billions of dollars.
For regular users, the takeaway is simpler: ChatGPT isn’t going anywhere. OpenAI is getting better at making money from it, which means the service will keep improving as they compete with Google and Anthropic for your attention.
Common Questions About OpenAI Profit Margins
Is OpenAI profitable now?
No. Despite improved margins, OpenAI is still losing money due to massive R&D, talent, and infrastructure costs. The company is valued at $500 billion but has yet to show a profit.
What’s the difference between compute margin and profit margin?
Compute margin only measures revenue minus the cost of running AI models. Profit margin would include all expenses: salaries, research, marketing, office space, etc. OpenAI’s compute margin is 70%, but their overall profit margin is negative.
Will ChatGPT prices go up?
Unlikely in the near term. OpenAI is competing with Google and Anthropic for users. Raising prices would push customers to competitors. They’re more likely to add premium features to justify existing prices.
Related Reading
Want to understand the AI business landscape? Check out these articles:
OpenAI Launches GPT-5.2: What “Code Red” Means — The competitive pressure OpenAI faces
What Is the AI Bubble? — Why I don’t think it will burst
Start Here — New to AI? Begin with our beginner guides.
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