OpenAI annualised revenue is $20bn lower than previously signalled

OpenAI’s annualised revenue is $20 billion lower than previously signalled, according to a report by the Financial Times.

The shortfall represents a striking adjustment to the financial expectations surrounding the world’s most prominent artificial intelligence startup. While OpenAI has enjoyed historic growth since ChatGPT took off in late 2022, the new figures suggest that sustaining that trajectory is proving more difficult than its earlier pitches to investors let on.

The company’s annualised revenue—a figure that takes a single month’s sales and projects them over a full year—has become a key metric for tech investors trying to value a business that is not yet profitable. But the new, lower run rate indicates that the gap between OpenAI’s current sales and its long-term targets is wider than previously understood.

Investor expectations and rising costs

The revision comes at a delicate time. OpenAI recently closed a massive $6.6 billion funding round, valuing the business at $157 billion. During those negotiations, the company presented highly ambitious growth forecasts to prospective backers. These pitches sketched out a path to tens of billions of dollars in annual sales, driven by corporate partnerships and paid ChatGPT subscriptions.

But keeping up that momentum requires vast resources. OpenAI is spending billions of dollars on the immense computing power needed to train and run its models, alongside the high salaries required to keep top-tier researchers from being poached by rivals like Google and Anthropic. The pressure to monetise its technology is immense.

If OpenAI’s actual sales are lagging behind what was previously signalled, it suggests that either corporate appetite for costly AI tools is growing more slowly than expected, or that the market is becoming highly competitive. OpenAI has not yet commented on the discrepancy, and the company has not said which specific period of forecasting the $20 billion shortfall refers to.

Structural changes and a crowded market

The revenue adjustment comes alongside a broader corporate overhaul. As part of its recent funding agreements, OpenAI is working to transition from its unusual non-profit-controlled structure to a traditional for-profit benefit corporation. Investors in the $6.6 billion round reportedly negotiated terms that would allow them to claw back their capital if this restructure is not completed within two years.

This shift has intensified the focus on OpenAI’s balance sheet. For years, the company operated as a research laboratory with a mission to develop artificial general intelligence for the benefit of humanity. Today, it behaves much more like a commercial giant, facing intense pressure from backers who expect a return on their multi-billion-dollar investments.

Meanwhile, the artificial intelligence sector has grown increasingly crowded. Rivals like Anthropic, backed by Amazon and Google, have released competitive models, while Meta’s open-source Llama models offer businesses a cheaper way to build their own AI tools without paying subscription fees to OpenAI.

This rising competition has put downward pressure on the prices developers pay to access these systems. While OpenAI has tried to stay ahead by releasing cheaper, faster versions of its technology, this price-cutting strategy may be eating into the higher revenues it previously hoped to secure. For now, OpenAI remains the market leader, but the latest financial reports suggest that the path to turning a profit on generative AI will be longer and more expensive than its optimistic pitches suggested.