OpenAI's Annualized Revenue $20 Billion Lower Than Previously Announced

OpenAI, the developer of ChatGPT, was reported on the 8th (local time) to have annualized revenue (earnings converted over a one-year period) $20 billion lower than the previously known figure of $70 billion. OpenAI recently told investors that its annualized revenue is approaching $50 billion as of late September. This falls far short of the figure it gave to some investors at the end of last month. The FT noted that this gap has the potential to sour optimism about growing demand for AI.

Annualized revenue is considered the most important indicator of overall AI demand, along with the equivalent figure for its rival Anthropic. It also serves as a measure underpinning massive infrastructure spending and the growth of listed stock markets.

Following the report, U.S. tech stocks fell. Nvidia dropped 2.94% from the previous day, while Broadcom and Micron Technology fell 4.4% and 4.8%, respectively. AMD declined 3.9% and SK Hynix ADRs slid 4.4%, as semiconductor-related stocks broadly weakened.

The FT assessed that the $50 billion annualized revenue reported in September still shows that OpenAI has been growing at a very rapid pace since the summer. However, it pointed out that the gap between investor expectations and the actual figures could fuel concerns about the growth trajectories of the large private AI companies that have taken center stage in the U.S. stock market.