OpenAI expects $70B annualized revenue by year-end

OpenAI expects its annualized revenue to reach or exceed $70 billion by the end of 2026, mostly on growth in its enterprise business, Bloomberg News reported, citing people familiar with the matter. The forecast came a day after a lower figure for the company's revenue set off a selloff in technology stocks. It gave some relief to chipmakers and other companies tied to the AI buildout.bloomberg

The people said OpenAI's annualized revenue was about $50 billion at the end of September. The company shared the numbers with investors as it tries to raise $30 billion or more at a $1.4 trillion valuation before the new money. OpenAI declined to comment.bloomberg

Why the numbers differed

Late last month, Axios reported that OpenAI was nearing a $70 billion run rate. On Thursday, Oct. 8, the Financial Times reported that the figure was close to $50 billion. The FT said the higher number came from investors who tried to compare OpenAI directly with Anthropic. The two companies count revenue differently. Anthropic books the gross amount of some sales made through cloud partners such as Amazon Amazon.com, Inc. ↗ 3.29%. OpenAI counts only its own share of sales through partners, including Microsoft ↗ 2.38%. Axios reported that both methods comply with U.S. accounting standards.thenextweb+2

Bloomberg Intelligence analysts Mandeep Singh and William Tong wrote that the confusion "largely reflects differences in how OpenAI and Anthropic calculate comparable revenue". A person familiar with the matter told CNBC that OpenAI's total run rate grew 77% in the third quarter and its enterprise run rate grew 107%. Bloomberg previously reported that Anthropic's annualized revenue reached $65 billion by the end of July.the-decoder+2

Markets recover after Thursday's slide

After the FT report on Thursday, the Nasdaq 100 fell 1.4% and an index of chip stocks dropped 3.4%. CNN reported that Oracle ↗ 4.21%, Intel ↘ 2.22% and Nvidia ↘ 0.52% were among the biggest losers. Nasdaq 100 futures rose overnight after the Bloomberg report. Nvidia and Micron Technology ↘ 0.66% were set to open higher on Friday, and tech shares led a modest recovery when trading began.qz+4

Fundraising and IPO plans

OpenAI has held talks with several investment funds from the United Arab Emirates, including Abu Dhabi-based MGX, to anchor the new round. In March it raised $122 billion at an $852 billion valuation, including the new money. CEO Sam Altman has ruled out an initial public offering in 2026. "I would say not 2026. Yeah, we got a lot of stuff to do," he told Fortune. Anthropic is expected to go public as soon as November.ibtimes+1

The company is still losing money and has projected it will burn through $280 billion by 2030, according to Investing.com. That raises the question The Decoder put this way: whether revenue "can keep pace with their massive spending commitments on compute buildouts over the long run".finance.yahoo+1