Tech stocks fall after FT reports OpenAI revenue run rate nears $50 billion
In short
OpenAI has told investors its annualized revenue is approaching $50 billion, about $20 billion less than previously reported, the Financial Times reported on October 8. Tech stocks fell after the report: the Nasdaq Composite dropped 1.25%, its worst day since mid-August, while Oracle fell 5.5%, Intel 5.3% and Nvidia 2.9%.
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Technology stocks fell on October 8 after the Financial Times reported that OpenAI had told investors its annualized revenue was approaching $50 billion, about $20 billion less than previously reported. The Nasdaq Composite sank 1.25%, its worst day since mid-August, and the S&P 500 fell 0.5%, CNN reported. Both indexes opened lower and declines accelerated after the FT report was published at midday. [ 2 , 3 , 4 , 6 ]
CNN reported selling across semiconductor chipmakers, cloud providers and other tech companies involved in the AI buildout. Oracle fell 5.5%, Intel 5.3% and Nvidia 2.9%. SiliconANGLE said Oracle has contracts with OpenAI valued in the multiple billions of dollars. CNBC's headline named CoreWeave and MarketWatch's named Micron among the AI stocks that fell. [ 1 , 3 , 5 , 6 ]
Outlets attributed the gap to different calculation methods. TechCrunch said Anthropic counts sales made by its cloud partners, while OpenAI does not. A source familiar with the documents told CNN that the $70 billion figure did not come from OpenAI and likely came from firms seeking to compare OpenAI's numbers with Anthropic's, which include gross revenue from cloud providers; OpenAI's figure is based on net revenue. The FT, as cited by TechCrunch, said the earlier figure was devised by OpenAI's own investors. SiliconANGLE put the earlier figure at $68 billion, widely reported two months ago, while TechCrunch said the $70 billion figure was reported a little over a week ago. [ 2 , 3 , 6 ]
According to a source cited by SiliconANGLE, company officials gave the $50 billion figure in an investor presentation, and also pointed to 77% growth in the annual revenue run rate in the third quarter and 107% growth for the enterprise business. Analysts cited by MarketWatch said the shortfall reflects differences in how the figure is reported, not weakness in AI demand. OpenAI declined to comment, CNN reported. [ 3 , 5 , 6 ]
"There are going to be tremors throughout all of the related sub-industries," Ross Mayfield, investment strategist at Baird, told CNN. CNN said the market had recently been buoyed by gains in tech and AI stocks while other sectors struggled under rising bond yields. [ 3 ]
CNBC reported that OpenAI is under pressure to justify its $852 billion valuation ahead of an expected IPO; it confidentially filed its prospectus in June and executives have signaled a 2027 debut. OpenAI raised $122 billion in a March funding round. CEO Sam Altman said in September that "right now would be an ill-advised moment to go public," in part because of safety concerns, CNBC reported. Anthropic told investors in August that its annualized revenue run rate hit $65 billion at the end of July, according to CNBC. [ 1 , 2 ]
Why it matters
CNN said the discrepancy could rattle investors already questioning whether AI demand will be strong enough for companies like OpenAI and Anthropic to turn a profit and justify the industry's spending on the AI buildout. CNBC reported that OpenAI is under pressure to justify its $852 billion valuation as it prepares for an IPO, while analysts cited by MarketWatch said the gap reflects how the figure is reported rather than weaker AI demand.
Key facts
- The Financial Times reported that OpenAI told investors its annualized revenue was approaching $50 billion. [ 2 , 3 , 6 ]
- The figure is about $20 billion less than previously reported. [ 2 , 3 , 4 , 6 ]
- The Nasdaq Composite fell 1.25%, its worst day since mid-August, and the S&P 500 fell 0.5%. [ 3 , 6 ]
- Oracle fell 5.5%, Intel 5.3% and Nvidia 2.9%. [ 3 , 6 ]
- Anthropic's annualized revenue counts sales or gross revenue from cloud partners, while OpenAI's is based on net revenue, according to reports. [ 2 , 3 , 6 ]
- OpenAI also pointed to 77% growth in its annual revenue run rate in the third quarter and 107% growth for its enterprise business, SiliconANGLE reported. [ 6 ]
- OpenAI declined to comment, CNN reported. [ 3 ]
Confirmed by several sources
- OpenAI told investors its annualized revenue was approaching $50 billion, according to the Financial Times. [ 2 , 3 , 6 ]
- The new figure is about $20 billion below the figure previously reported. [ 2 , 3 , 4 , 6 ]
- The Nasdaq fell 1.25% and the S&P 500 fell 0.5% after the report. [ 3 , 6 ]
- Oracle fell 5.5%, Intel 5.3% and Nvidia 2.9%. [ 3 , 6 ]
- OpenAI and Anthropic calculate annualized revenue differently, with Anthropic including revenue from cloud partners. [ 2 , 3 , 6 ]
- OpenAI raised $122 billion in a funding round in March. [ 1 , 2 ]
- OpenAI's IPO is expected in 2027. [ 1 , 2 ]
Still unclear
- The size and timing of the earlier reported figure. TechCrunch said about $70 billion was reported a little over a week ago; CNN also cites $70 billion; SiliconANGLE says $68 billion was widely reported two months ago.
- Where the higher figure came from. A CNN source said it did not come from OpenAI and likely came from firms comparing OpenAI with Anthropic; the FT, cited by TechCrunch, said it was devised by OpenAI's own investors; a SiliconANGLE source said it included gross revenue from OpenAI's partners.
- Whether the figure signals weaker AI demand. Analysts cited by MarketWatch said it reflects reporting differences, not weaker demand; CNN said the discrepancy could rattle investors questioning AI demand.
- OpenAI's own account of the figures. OpenAI declined to comment to CNN, and TechCrunch said it had reached out for comment.
What local media are saying
Timeline, local time
- CNBC reports Nvidia, Oracle, CoreWeave and other AI stocks sink on the OpenAI revenue report. [ 1 ]
- TechCrunch reports OpenAI's revenue is about $20 billion less than previously projected, citing the FT. [ 2 ]
- CNN reports the Nasdaq Composite sank 1.25% after the FT report. [ 3 ]
- Reuters reports the FT account of OpenAI's annualized revenue. [ 4 ]
- MarketWatch reports chip stocks fell and analysts say the report causes 'undue concern'. [ 5 ]
- SiliconANGLE publishes an updated report on the fall in AI stocks. [ 6 ]