OpenAI projected to bring in $20bn less in revenue than expected

THE NEWS

What happened

OpenAI has revised its annual revenue forecast downward by approximately $20 billion, projecting $50 billion instead of the previously signaled $70 billion for this year. This adjustment stems from a methodological shift to align with rival Anthropic's reporting standards, which include cloud partner revenues that OpenAI excludes. The news triggered a significant sell-off in US tech stocks, including Nvidia and Oracle, while highlighting ongoing safety concerns that have delayed OpenAI's planned IPO despite its massive recent fundraising.

CONTEXT

Why it matters

OpenAI has cut its revenue forecast by $20 billion, now expecting $50B this year instead of the previously reported $70B. The adjustment reflects a change in how sales are counted compared to rival Anthropic, which includes cloud partner revenue. This news shook US markets, dropping major tech stocks like Nvidia and Oracle. Additionally, OpenAI CEO Sam Altman confirmed the company will not go public this year due to growing safety concerns over rogue AI agents, while politicians on both sides of the aisle demand stricter regulations.

AT A GLANCE

Key facts

• OpenAI reduced its projected annual revenue to $50 billion, down from a previous forecast of $70 billion.
• The $20 billion gap resulted from excluding cloud partner sales (like AWS and Google Cloud) in OpenAI's metrics, unlike Anthropic's approach.
• The revenue discrepancy caused the Nasdaq to drop 1.4%, with Nvidia falling 2.9% and Oracle down 5.5%.
• CEO Sam Altman confirmed OpenAI will not go public this year due to AI safety risks and rogue agent incidents.
• Anthropic is preparing for an IPO next month after raising $65 billion in recent funding.
• US politicians from both parties are pushing for new regulations following warnings about existential AI risks.