Shares of major artificial intelligence companies, including Nvidia, Oracle, and CoreWeave, declined after OpenAI disclosed that its annualized revenue reached approximately $50 billion at the end of September, a figure confirmed by CNBC and notably lower than the $68 billion previously reported late last month [1]. According to a person familiar with the matter, the higher $68 billion figure included gross revenue from OpenAI's partners, which was intended to facilitate direct comparison with its main competitor, Anthropic [1]. The Financial Times was the first to report the $50 billion figure [1].
OpenAI presented these updated financials to investors, highlighting a 77% total run rate growth during the third quarter and a 107% run rate growth for its enterprise business in the same period, as per a source familiar with the numbers [1]. Despite these growth rates, the company faces pressure to justify its $852 billion valuation as it prepares for a highly anticipated IPO, having confidentially filed its prospectus with regulators in June and signaling a potential 2027 debut [1].
In the meantime, OpenAI is in early discussions with investors about a possible new funding round, which could raise around $30 billion, though this figure is subject to change and no term sheet has been finalized [1]. The company previously closed a $122 billion funding round in March, and CFO Sarah Friar stated last week that OpenAI remains 'very well capitalized' [1].
The market reacted negatively to the news of OpenAI's revised revenue figures, with shares of Nvidia, Oracle, CoreWeave, and other AI-related stocks moving lower on Thursday [1]. The revelation that OpenAI's annualized revenues are $20 billion less than previously signaled contributed to the decline in these stocks [1].
CONCLUSION
OpenAI's disclosure of lower-than-expected annualized revenue led to a significant drop in AI-related stocks, including Nvidia and Oracle. The market is reassessing OpenAI's valuation and growth prospects as the company prepares for a potential IPO and considers new funding. Investor sentiment has turned cautious amid the revised financial outlook.