OpenAI Reports $50 Billion Annualized Revenue, Still Targets $70 Billion by Year-End

OpenAI, the developer of ChatGPT, communicated to investors that its annualized revenue stood at nearly $50 billion at the close of September. This figure represents a notable difference from the approximately $70 billion in annualized revenue that had been widely circulated in media reports last month. The company, however, maintains a projection to reach or exceed $70 billion in annualized revenue by the end of 2026, primarily driven by growth in its enterprise business.

The variance between the $50 billion and $70 billion figures is largely attributable to how revenue from sales through cloud partners is accounted for. Rival AI firm Anthropic, for instance, includes the full gross value of sales made via cloud partners in its revenue calculations. In contrast, OpenAI’s reported figures generally reflect only its share of proceeds from such arrangements, including those with partners like Microsoft. This accounting difference, rather than a slowdown in demand for AI services, explains the $20 billion gap.

OpenAI’s Chief Financial Officer, Sarah Friar, indicated that the company's revenue had increased by 70% from the end of June to the end of September. The company's internal disclosures to investors also highlighted substantial quarterly growth rates, with total run rate growth at 77% and enterprise revenue growth at 107% during the third quarter.

The initial reports of a lower annualized revenue figure led to some volatility in the technology sector. On Thursday, October 8, shares of AI-linked companies such as Nvidia, Oracle, and Micron experienced declines, and the Nasdaq 100 fell by 1.4%. However, following reports that OpenAI still aims for the $70 billion target by year-end, Nasdaq futures showed a rebound.

Despite its rapid revenue growth, OpenAI continues to face challenges related to profitability. The company has projected a cumulative cash burn of $280 billion by 2030. OpenAI is also engaged in discussions for a new funding round, seeking approximately $30 billion, which could value the company at around $1.4 trillion. This follows a $122 billion funding round in March at an $852 billion post-money valuation.

OpenAI CEO Sam Altman announced last month that the company would delay its initial public offering (IPO) in 2026, citing concerns over AI safety. Meanwhile, competitor Anthropic, which reported an annualized revenue of $65 billion by the end of July, is expected to proceed with an IPO as early as November.