OpenAI’s annualised revenue is about $20bn less than the company had signalled, according to financial documents shared with investors, a massive gap likely to damp optimism about the growth of AI demand.
The company has recently told investors its revenues were approaching $50bn on an annualised basis at the end of September, far short of the $70bn reported by the FT and other media outlets late last month based on information that was provided to investors.
The metric, along with the equivalent figure for OpenAI’s rival Anthropic, is the most important indicator of overall demand for AI and underpins vast infrastructure spending and the growth of public equity markets.
US tech stocks fell sharply following the FT’s report on Thursday, extending losses from earlier in the session, with the Nasdaq 100 closing down 1.4 per cent. Chipmaker Nvidia fell 2.9 per cent, Oracle dropped 5.5 per cent and Micron declined 4.8 per cent.
The discrepancy arose from attempts by OpenAI’s investors to produce a direct comparison with Anthropic’s annualised revenues, said a person familiar with the matter. The pair calculate the figure in different ways, with Anthropic including the revenue from sales via cloud partners such as Amazon’s AWS and Google Cloud, while OpenAI does not.
Investors’ efforts to “gross up” OpenAI’s annualised revenue prompted reports that the figure was about $40bn in July, said the person.
The company later told its backers that its annualised revenues had jumped more than 70 per cent since July, prompting reports that the figure was about $70bn at the end of September — a number the company did not deny.
However, the new investor presentation shows close to $30bn annualised revenues in July.
As a private company, OpenAI is not required to regularly disclose its financials publicly. It declined to comment.
The ChatGPT maker is in talks with investors about a new private funding round that could value the company at about $1.4tn. Annualised revenues are the critical figure investors weigh to gauge OpenAI’s outlook and its performance compared to Anthropic.
The $50bn in annualised revenues reported in September still points to a rapid rate of expansion for the AI company since the summer.
But the gap against investors’ expectations will exacerbate concerns over the trajectory of large, private AI companies whose prospects are central to the US stock market and have helped fuel strong growth in the US economy.
OpenAI has committed to spending hundreds of billions of dollars on computing power and infrastructure, funded by revenue from its AI tools as well as vast investment from partners. It also has the backing of tech groups including Nvidia, Microsoft and Amazon.
The lossmaking company, which projects it will burn almost $280bn by 2030, is in a fiercely competitive race with Anthropic, Big Tech rivals including Meta and Google and smaller groups, mainly from China, that are building cheaper, open AI models.
OpenAI confidentially filed its prospectus for an initial public offering in June and was expected to go public this autumn.
However, the company has since delayed those plans amid growing concerns about the threat posed by powerful AI. Chief executive Sam Altman has said the start-up will not “barrel all guns blazing towards an IPO” when AI is rapidly advancing in capabilities.
The group is also facing a wave of legal action and government censure over recent hacks by its models.
Additional reporting by George Steer in New York