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OpenAI capital expenditure projected to exceed major cloud providers by 2029
Sunday, December 28, 2025 at 09:41 AM
Citi forecasts that OpenAI's capital expenditures could surpass the combined spending of the four largest cloud service providers by 2029. The bank expects significant financial pressure on OpenAI starting in the second half of 2026 as infrastructure bills come due, which may increase stock volatility for partners like AMD due to their high exposure to OpenAI's infrastructure build-out.
Context
Citi analysts recently projected that OpenAI’s annual capital expenditure could surpass the combined spending of the four largest cloud service providers by 2029. This aggressive expansion is part of a massive $1.15 trillion infrastructure plan that includes multi-year commitments for hardware and data center capacity. However, a critical pivot point is expected in 2H26, when major infrastructure bills begin coming due. Investors are increasingly concerned that the heavy debt burden required to fund this build-out is unsustainable, particularly if OpenAI’s revenue growth fails to keep pace with its escalating costs.
AMD is uniquely exposed to this spending cycle through a blockbuster agreement to deploy 6GW of its GPUs for OpenAI starting in 2026. The partnership, which includes a potential 10% equity stake for OpenAI, positions AMD as a primary beneficiary of the build-out but also introduces significant volatility. Citi warns that the high customer concentration and the precarious nature of OpenAI’s financing make AMD particularly vulnerable to any slowdown in AI infrastructure funding. Consequently, analysts are advising a shift toward semiconductor stocks with lower exposure to OpenAI as the market reassesses the long-term viability of this record-breaking expenditure.
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