OpenAI expects $70B run rate by year-end, report says

OpenAI expects its annualized revenue to reach or pass $70 billion by the end of this year, mostly on the back of its enterprise business, Bloomberg News reported, citing people familiar with the matter. The ChatGPT maker's annualized revenue was about $50 billion at the end of September, the people said. OpenAI shared the figures with investors as part of talks for its latest fundraising round.finance.yahoo+1

The report came out early Friday, a few hours after a Financial Times report that OpenAI's revenue was running about $20 billion below what had been signaled earlier. That report set off a selloff in technology shares on Thursday. US stock futures rose after the Bloomberg report, which pointed to a smaller hit to the AI trade than investors had feared. OpenAI declined to comment.investing+2

Behind the gap in revenue figures

Annualized revenue projects a company's yearly sales from a shorter period of results. AI developers often promote it as a growth measure, but they do not all calculate it the same way. Some outlets reported last month that OpenAI was already approaching $70 billion, based on investor estimates. According to the Financial Times, that number came from investors applying the method used by rival Anthropic, which counts sales through cloud providers differently. Bloomberg has previously reported that Anthropic's annualized revenue reached $65 billion by the end of July.finance.yahoo

To go from about $50 billion in September to $70 billion by December, OpenAI's run rate would have to grow by roughly 40% in the final quarter.

Market reaction

On Thursday, tech stocks led the S&P 500 lower. The Nasdaq 100 fell 1.4%, and a gauge of chipmakers dropped 3.4%. In Asian trading on Friday, Bloomberg reported that S&P 500 futures were up 0.3% and Nasdaq 100 futures were up 0.4% at one point. Hong Kong's Hang Seng also gained.swissinfo+1

"OpenAI is now talking about $70 billion in annualized revenue by the end of 2026, but questions over the revenue picture have still taken some steam out of the AI trade," Tim Waterer, chief market analyst at KCM Trade, told Bloomberg. Takuro Hayashi of IwaiCosmo Securities said such stories "emerge from time to time" and do not mean "there's something fundamentally wrong with the direction of the industry".swissinfo

Fundraising and IPO plans

OpenAI is in talks to raise $30 billion or more at a $1.4 trillion valuation before the new money, according to Bloomberg. Investment funds from the United Arab Emirates, including Abu Dhabi-based MGX, are among those in discussions to anchor the round. The company raised $122 billion in March at an $852 billion valuation, including the new money.finance.yahoo

OpenAI has delayed its initial public offering until at least next year, citing its focus on AI safety. Anthropic could go public as soon as November. Investing.com noted that OpenAI is still losing money and has projected it will burn $280 billion by 2030. Corporate earnings season starts next week and will test whether AI revenue can keep up with spending on the infrastructure.investing+2