Projected $5 Billion Annual Loss and Bankruptcy Risk (critical) OpenAI is projected to incur approximately $5 billion in losses in 2024 on $3.7 billion in revenue. The company reportedly spends $7 billion on training its AI models and $1.5 billion on staffing, leading analysts to suggest it could run out of cash and face bankruptcy within 12 months unless significant capital is raised.. CEO Sam Altman's Abrupt Ouster and Reinstatement (critical) On November 17, 2023, the OpenAI board abruptly ousted CEO Sam Altman, stating he was 'not consistently candid.' This led to five days of corporate chaos, multiple interim CEOs (Mira Murati, Emmett Shear), the resignation of key co-founders and researchers (Greg Brockman, Ilya Sutskever), and a threat by over 90% of employees to quit before Altman was reinstated and the board was reorganized.. €15 Million GDPR Fine by Italian Regulator (Garante) (high) Italy’s data protection authority (Garante) imposed a €15 million fine on OpenAI (decision date Dec 20, 2024) for multiple GDPR violations, including: 1) processing personal data for training without an adequate legal basis (€9M); 2) failure to report a March 2023 data breach (€320k); and 3) failure to comply with corrective measures imposed in 2023 (€5.68M).. Active FTC and SEC Regulatory Investigations (high) OpenAI is under active investigation by the U.S. Federal Trade Commission (FTC) (since July 2023) regarding potential consumer protection law violations, specifically focusing on reputational harm caused by AI 'hallucinations' (false statements about individuals) and privacy/data security practices. The company is also being probed by the SEC following the CEO's short-lived ouster.. Massive Copyright Infringement Litigation (NYT, Authors Guild, GEMA) (high) OpenAI is facing consolidated, high-stakes litigation globally regarding its training data practices. Key lawsuits include: 1) The New York Times (Dec 2023, alleging use of millions of copyrighted articles); 2) The Authors Guild (Sept 2023, class action by 17 writers); and 3) GEMA (Nov 2024, German music copyright society, alleging use of 95,000 members' song lyrics). These cases challenge the core legality of AI model training.. Executive and Research Leadership Exodus in 2024 (high) The company experienced a significant leadership exodus in September 2024, including the departures of CTO Mira Murati, Chief Research Officer Bob McGrew, and VP of Research Barret Zoph, among others. This follows the internal instability from the CEO ouster and indicates ongoing strategic or cultural misalignment among top technical staff.. Use of Aggressive Non-Disparagement Agreements (NDAs) (high) OpenAI faced major public backlash in May 2024 after leaked documents revealed the company used 'expansive and highly restrictive' non-disparagement agreements (NDAs) with departing employees, threatening to claw back vested equity. The company subsequently ended these harsh agreements.. Failure to Notify Regulator of Data Breach (high) OpenAI failed to inform the Italian Garante (as required by GDPR Article 33) of a data breach that occurred on March 20, 2023. The internal bug exposed personal data, specifically chat histories and payment information, of 440 Italian ChatGPT Plus subscribers. This failure resulted in a portion of the €15 million fine.. Systemic Customer Service and Billing Failures (BBB) (medium) OpenAI has a high volume of unresolved customer complaints (239 total in the last 3 years, reviewed March 2025) filed with the BBB. Complaints detail systemic failures, including: paying for 'Business' accounts that were never fully provisioned (since July 2025 in one specific complaint); inability to reach human support (only AI bots); and 'bait-and-switch' practices regarding advertised features and subscription model access.