OpenAI tells investors to expect $50bn revenue this year, not $70bn
OpenAI has told investors that its revenue for this year would reach $50bn (£37bn), a projection based on sales up to the end of September. That is about $20bn less in projected revenue than the $70bn it had signalled in information provided to investors last month, a figure that was widely reported. The Guardian says the gap raises questions about the break-neck growth rate in demand for AI.
According to the article, the discrepancy arose from attempts by OpenAI investors to provide a more direct comparison with how projected revenue is measured by Anthropic, the maker of Claude. Anthropic includes revenue from sales via cloud partners, such as Amazon's AWS and Google Cloud, in its figure, while OpenAI does not. Anthropic hit $65bn in forecast revenue by the end of July.
The forecasts of annualised revenues by the leading AI players are closely watched by markets as an indicator of overall demand for a technology that is attracting huge investment. News of the $20bn gap buffeted US tech stocks on Thursday. The tech-led Nasdaq closed down 1.4%, Nvidia fell 2.9%, Oracle was down 5.5% and Micron declined 4.8%.
The timing is awkward for OpenAI's finances. It is in early-stage talks to raise $30bn in a funding round that values the business at about $1.4tn. Its most recent fundraising was in March, when it closed a $122bn round at a valuation of $852bn. Two months later Anthropic announced it had raised $65bn, valuing the company at $965bn.
The article also sets out the wider backdrop. Last month, Sam Altman, the chief executive of OpenAI, said the company would not float on the stock market this year as had been expected, citing safety concerns over AI. His decision followed cases of AI agents going rogue to hack external systems and AI safety researchers quitting their companies over the technology's risks. Democrat and Republican politicians are calling for new rules to govern AI systems, after two researchers from Anthropic warned that the lightning pace of AI development without safeguards could lead to the extinction of the human race. Anthropic is expected to push ahead with plans for an IPO as soon as next month.
On Friday, it emerged that Masayoshi Son, the founder of Japanese investment company SoftBank, is seeking to raise up to $100bn from Gulf states as he scales up his investments in AI. SoftBank has pivoted aggressively towards AI, including a $65bn investment in OpenAI, and the Financial Times reported that discussions have been held with Gulf investors including the United Arab Emirates. Last month SoftBank raised $11.1bn in the largest high-yield corporate bond sale globally on record, paying investors yields as high as 9.75%, to fund its bets on AI and semiconductor assets.
Key facts
- OpenAI told investors its revenue this year would reach $50bn, based on sales up to the end of September, about $20bn below the $70bn signalled last month.
- The gap arose from investors trying to compare OpenAI more directly with Anthropic, which includes cloud-partner sales (AWS, Google Cloud) in its figure while OpenAI does not.
- US tech stocks fell on Thursday: Nasdaq down 1.4%, Nvidia down 2.9%, Oracle down 5.5%, Micron down 4.8%.
- OpenAI is in early-stage talks to raise $30bn at a valuation of about $1.4tn; its March round was $122bn at $852bn.
- Anthropic reached $65bn in forecast revenue by the end of July and is expected to push ahead with an IPO as soon as next month.
Why it matters
Revenue forecasts from the leading AI companies are closely watched by markets as a gauge of overall demand for AI, a technology attracting huge investment. A $20bn cut to the figure OpenAI gave investors, from $70bn to $50bn, landed on the same day as a drop in US tech stocks, and the Guardian says it raises questions about the break-neck growth rate in demand. It also lands while OpenAI is in early-stage talks to raise $30bn at a valuation of about $1.4tn.
Who it affects
Investors in and around OpenAI are the first group: the company's backers, including SoftBank with its $65bn investment, and those being courted for the new $30bn round. Listed tech and chip stocks also reacted, with Nvidia, Oracle and Micron all lower on Thursday. Anthropic is affected as the comparison point, with an IPO expected as soon as next month. SoftBank's Masayoshi Son is seeking up to $100bn from Gulf states to scale up AI investments, so the funding chain behind these companies is exposed to how the numbers are read.
How to use it
Treat headline revenue figures from AI labs as measured by different rules. In this case Anthropic counts sales made via cloud partners such as AWS and Google Cloud, while OpenAI does not, so the two numbers are not directly comparable until the definitions are lined up. Before reading a forecast as a sign of strength or weakness, check what it includes and what period of sales it is based on. The $50bn figure rests on sales up to the end of September.
How solid is it
The report is the Guardian's account of what OpenAI told investors. The figures ($50bn now, $70bn signalled last month, the $20bn gap) and the market moves are stated plainly in the article, and the Friday report on SoftBank and Gulf investors is attributed to the Financial Times. The article gives no direct quote or statement from OpenAI, Anthropic or investors about the revenue figures, and it does not say who at OpenAI communicated the $50bn figure or through which channel beyond 'told investors'.
Risks and caveats
The article does not say that demand for AI actually fell; it only says the gap raises questions about growth in demand. It also does not state what OpenAI's revenue would be under Anthropic's measurement method, nor how much of the $20bn gap is due solely to the measurement difference. The article does not say which stock moves were caused by which factor beyond saying the news 'buffeted' US tech stocks. The $30bn round is described only as early-stage talks, with no timescale for closing.