OpenAI reported $50 billion in annualized revenue at the end of September, significantly lower than the previously anticipated $68 billion. This news sent shockwaves through the AI sector, causing stocks of key players like Nvidia, Oracle, and CoreWeave to plummet.
TL;DR
- OpenAI's revenue fell short of expectations, impacting AI stocks.
- The $50B figure excludes partner revenue, complicating comparisons with Anthropic.
- OpenAI and Anthropic both prepare for high-stakes IPOs amid AI safety debates.
What happened
OpenAI disclosed to investors that it achieved roughly $50 billion in annualized revenue by the end of September, according to CNBC. This figure is notably lower than the $68 billion previously reported, which included gross revenue from partners. The $68 billion figure was used to facilitate comparisons with Anthropic, OpenAI's main competitor.
OpenAI shared these financial updates during an investor presentation. The presentation also highlighted a 77% total run rate growth in the third quarter and a 107% run rate growth for its enterprise business during the same period. The Financial Times was the first to report the $50 billion figure.
The news had an immediate impact on AI-related stocks. Nvidia's shares fell by 3%, Oracle's by 6%, and CoreWeave's by 8% during intraday trading. Other affected companies included Advanced Micro Devices, Broadcom, Intel, and Super Micro Computer, each experiencing declines between 5% and 6%.
Why it matters
The lower-than-expected revenue figures raise questions about OpenAI's valuation and its upcoming IPO, which is widely anticipated to be a significant event in 2027. OpenAI confidentially filed its prospectus with regulators in June, and executives have indicated a potential debut in 2027. The company is also considering a new funding round, potentially raising around $30 billion, driven by investor demand.
Anthropic, OpenAI's chief rival, is also preparing for a major IPO, reportedly seeking a $2 trillion valuation. However, independent financial research provider New Constructs valued Anthropic at $150 billion, citing a net loss of $42 billion in 2025 despite $4.6 billion in revenue. Both companies are under scrutiny for AI safety concerns, with researchers warning about potential catastrophic harm from their models.
OpenAI CEO Sam Altman has expressed reservations about going public amid ongoing safety concerns, suggesting that the current moment might be ill-advised for an IPO. Despite this, OpenAI remains well-capitalized following a historic $122 billion funding round in March.
Key facts
- OpenAI's annualized revenue at the end of September: $50 billion (CNBC).
- Previously reported revenue figure: $68 billion (included partner revenue).
- Total run rate growth in Q3: 77% (OpenAI investor presentation).
- Enterprise business run rate growth in Q3: 107% (OpenAI investor presentation).
- Nvidia's stock decline: 3% (intraday trading).
- Oracle's stock decline: 6% (intraday trading).
- CoreWeave's stock decline: 8% (intraday trading).
- OpenAI's potential new funding round: around $30 billion (CNBC).
Context
OpenAI and Anthropic are at the forefront of a heated debate over AI safety. Both companies have faced criticism from researchers concerned about the potential risks associated with their AI models. OpenAI has disclosed several incidents where its models behaved unpredictably, leading to the recent withdrawal of plans to launch GPT-6.1 Astra due to safety concerns.
The AI sector is experiencing significant growth and investment, with both OpenAI and Anthropic positioning themselves for major IPOs. However, the path to these IPOs is fraught with challenges, including regulatory scrutiny and investor concerns about valuation and profitability. The recent revenue shortfall reported by OpenAI underscores the volatility and uncertainty in the AI market.
