OpenAI annualised revenues $20B less than previously signalled

How much money do they have left? It is hard for me to see how OpenAI doesn't fail at this point. There is no business, no moat. Honestly, the best outcome seems like failing up into a Microsoft acquisition at this point.

> zero information on how it’s doing

I think the fact that we have so little information is the most important information we have. If OpenAI had a sound business plan and was on strong financial footing, they'd have IPO'd.

All of this continued stalling and obfuscation can only mean one thing, IMO: OpenAI has no long-term viability and they're desperately hoping for some new breakthrough to reinvent their business model before the VC money faucets turn off for good.

Nobody is quiet about doing well. And the frenetic release schedule of kinda half baked products tells a story (not a good one)

it really is a privatize the gains socialize the losses situation, isn't it? due to the new rules (or lack thereof), public investors didn't have access to all that growth.

no way it ever gives you a return like, say, the amazon IPO could've.

What regulation makes it so that a large private company would have to go public? You have it backwards. Increased regulations make it more burdensome for a company to go public, driving companies like OpenAI to remain private. If you made it less expensive and burdensome to IPO (decreased regulation), you would see companies go IPO earlier.

This also coincides with a growing market for private credit and VC which certainly helps companies stay private for longer.

They would go public if they were doing well.

> This is an interesting shift compared to the past where OpenAI would’ve been public a long time ago (due to various regulations) so we would have much more direct insight.

There's a good recent YouTube video about the shift in regulations that switched IPOs from being a way to raise money for growth to being a way to dump on retail investors after all the significant growth has been funded by private investors:

https://www.youtube.com/watch?v=roe3SgezmmU

There are bits and pieces of info scattered everywhere but no coherent picture. We know from a16z report [1] that only 2% of US households pay for AI subscriptions, so most of the seat based pricing comes from business and enterprise agreements. We know that OpenAI ads business has $1 billion USD in annualised revenue run rate [2]. We know from OpenRouter data [3] that in 2025 70% of the API token spend was across all the proprietary models (Anthropic did very well in 2025, while OpenAI clawed back market share in 2026).

It all starts to look like a very low margins business, and reminds me very much of telecom industry.

[1] https://www.a16z.news/p/state-of-markets-ii

[2] https://www.reuters.com/business/media-telecom/openais-ad-bu...

[3] https://openrouter.ai/state-of-ai

>Right now we have a ~$1 trillion company which a ton of the “economy” and valuations are based on, with near zero information on how it’s doing.

This is definitely by design and encouraged by the VC’s. It’s disgusting to consider what a simulacrum of a market the stock market has actually become.

It’s because this IPO is backed by those who grew up through the boom and bust of the dotcom era, so they know now to do all their growth in secret behind the scenes and then dump onto the market when there’s nothing more in that tank. Rather than letting the public have any major growth out of their baby, and only letting the price discovery phase work one way.

I agree with you for sure, but fwiw there’s a simpler alternate explanation, or at least there’s another way of saying the same thing

I’ve asked at rapidlu growing unicorns where I’ve worked “why don’t we ipo” and the big wigs every time just say, “why?”

If the original point of the ipo was to raise money and now you can do that privately, it stands to reason that a simple explanation might be that it’s not worth the hassle until the VC’s say they want their money back

What past regulations would have forced OpenAI to go public sooner?

Casual Finance did a video on this recently. He explains that prior to 2012 there was a rule that private companies would need to start reporting their financials once they reach the threshold of 500 investors. Because of this they would usually just choose to go public at that point. But since the rule was removed, companies are waiting longer because they don’t have that forcing function anymore. Also, the rich have never been richer so the private money is abundant anyways so there isn’t really a need to go public until you’ve reached the highest valuation you think you can ever get.

We actually have a lot of information on this [1], just indirectly: reported figures, revenue commitments with the hyperscalers, announced funding rounds, and so on. The hyperscalers invest directly in OpenAI and Anthropic, so their bets rest on growth they can see from the inside. They have a clear view of the slope of the curve.

OpenAI is already at about $50B in annualised revenue, up from $21B at the end of last year. That puts it on track to beat its internal projection of $58B by year-end.

Of course, none of this answers the trillion-dollar question of whether that growth will continue. But that question is separate from the claim that OpenAI needs to go public before we can see what’s going on. If anything, I think it’s better for them to stay private while venture capital keeps funding them and until they’ve shown they can sustain their growth. The longer they wait before raising public money, the less risk they add to public markets.

[1] https://finance.visnia.xyz/economy/ai-buildout

Obviously not the same thing as lying, but Anthropic had also been juicing the revenues with making smart models incredibly verbose. In August my org 3x more in API credits vs July. In September the spend returned to July levels partially because they made models less verbose, but mostly because we've changed how we are using them.

> Apparently they overstated revenue in an attempt to try to provide a direct comparison with Anthropic's reported metrics.

Just to clarify from my understanding of the quote, "they" here is openai investors, not openai.

All that tells you is that they haven't at all abandoned the disinformation: Now they are blaming Anthropic for it and trying to shift attention to them.

You can still learn something from it: Look at what they do, not what they say - look at how sophisticated their public communication is. They deliver that information in the perfect manner - not only the redirection and striking a blow against their rival, but they use an anonymous "person with knowledge of the matter": A named source at OpenAI might betray the self-interest in the statement, but some anonymous third party is just reporting what they know.

These guys are very good at it, though that shouldn't surprise you. Look at their product, in one sense a highly effective disinformation machine.

> Apparently they overstated revenue in an attempt to try to provide a direct comparison with Anthropic's reported metrics.

I'm confident both companies are lying about their revenues.

The link doesn't work.

>The pair calculate the figure in different ways, with Anthropic including the revenue from sales via cloud partners such as AWS and Google Cloud, while OpenAI does not.

gift link didn't work for me, and is this poorly phrased? because it seems implausible that OpenAI doesn't typically include revenue from their models being used on AWS. Perhaps the "gross up" is referring to how the number is included? like Anthropic was using the value pre-removal of revenue sharing and putting the revenue share subtraction as a separate expense?

[not a finance guy so someone tell me I'm wrong if that's not a plausible reading]

It's called we're lucky we're not listed

in this case nothing. they are not public, and they never lied to their actual investors that we know of, they were just being tongue in cheek with the press and never actually made any materially false statement. Being oblique does a lot of the heavy lifting here.

Business as usual

It signals Anthropic is growing faster than OpenAI, and the market still feels the upside of AI is that it will eat all software and services.

Zitron complained about a lot of things, one some he was wrong (eg. llm are not useful), on others(eg. "magic accounting" or datacenters ) he has very good points ... but we will see.

This is pretty much the main point of his frustration.

The world has standardised methods of accounting. Not only do Anthropic and OpenAI avoid using those methods, they both use the same phrase “annualised revenues” to describe two radically different accounting processes.

They’re both also leaking those annualised numbers slowly to the press at irregular intervals, which hints that they’re disclosing new numbers in the days after a big sale lands. So you see “$30bn annualised” because they managed to land a $1bn contract the week before, bumping the annualised figure up by $12bn compared to the start of the previous month, and the end of the next.

Both. But he’s going to be insufferable if the market does go pop.

No one has rebutted Ed's points. The only rebuttal is "but look how cool AI is!". He mainly sticks to objective facts about their financial situation, and an honest analysis of that situation is dire, regardless of what you think of AI.

I think a bit stopped clock and a bit that a clock that puts out 20,000 words a month will have some of them make sense.

I assume Ed Zitron is immune to being surprised by now.

Ed Zitron is a hack with no tech or financial literacy, who gains views from fellow biased AI haters.

"The $70b estimate was based on a comparison to Anthropic" -- Can you prove that? All I could find were major outlets (Reuters, Yahoo Finance) citing an Axios report, that itself cited "sources familiar with the financials tell Axios.". I haven't found anything similar to what you are claiming.

No. You should read the article

> based on information that was provided to investors.

It was OpenAI spreading their bullshit annualized revenue.

OpenAI and Anthropic always play this silly game to pretend they are in anyway viable. It is always ARR, "adjusted" revenue, etc. "We are profitable when we pretend we don't have expenses".

Exactly.

  > far short of the $70bn reported by the FT and other media outlets late last month based on information that was provided to investors.

Media was mislead by second hand information and misled the public, now they are 'shocked' they reported incorrectly..

Still, seems it is still true that their number is not directly comparable to Anthropic's because they calculate it differently, I think that part still stands and is pretty relevant here.

Sorry Bence I trust the FT journalists to have due diligence w.r.t. what evidence of AR they got from investors (who got it from OpenAI). I completely believe that the company helmed by "not consistently candid" sama bullshits investors about their AR which is the point of this article.

Though I agree with your sentiment that FT is reporting this stuff in a way to stir the pot and create outrage. Speculating about a private company like this is stupid.

When the dust settles, I reckon OAI will make FTX's losses look like chump change

I doubt it.

People have a hard time differentiating between bets vs. fraud.

OpenAI is a bet. Maybe a bad bet. Sure. But everyone knows it is a bet. Their investors are experienced and multi-millionaires with teams of analysts. They cannot just act like they are dumb. Not say it's impossible but highly unlikely they can just claim they don't know any better.

SBF was a fraud for using the customers' funds. The customers were promised that their money wouldn't be used for anything. And their customers are average people. Albeit, SBF's investments are pretty godlike based on the current valuations.

It is rarely a challenge to turn $100 into $50.

Nvidia’s revenue is more than that per quarter, the demand for AI workloads is through the roof.

Yeah, take your most profitable day/week/month and multiple it by 365/52/12.

My employer is paying thousands per month for my tokens. Multiply that by a million people and there’s your $50B per year.

You might ask: how could this possibly pencil out for my employer? Answer: I’m the only person left on what used to be a team.

My team at my company alone burned through $100k worth of tokens in September.

When it hit $20k it triggered a talk with management, but ultimately they decided it was worth because of the value the LLM was providing.

judging from SpaceX performance, I think the market can handle a couple more low float high valuation issuances

The public markets have floated multiple names up to $6tr marketcap/valuation

so the debuts at $1tr valuation from the private markets don’t mean anything

pre-IPO investors will just collar like they did SpaceX, nullifying any price volatility for them at the high share price, and giving them all the liquidity collateral they need for borrowing

The margin call will be brutal if you’re wrong and it takes a few more years than you thought for the trend to break.

I mean, if you picked almost any random time in the last 4 years that'd be true.

https://www.sec.gov/Archives/edgar/data/1341439/000119312526... says that in June–August 2026 Oracle made $7.39b from cloud infrastructure, $4.22b from cloud applications (aka their SaaS business), $655m from licensing their software, and $4.9b from support.

They don't need help, as most firms with that much red on the books shouldn't be allowed to float an IPO based on fictional future growth forecasts.

IMHO, the Bears will be proven right on this one sooner or later. =3

still waiting and my popcorn is spoiled already

Maybe Anthropic.

I imagine, when your company grew astronomically fast to the level that was unseen in the past, the investors would be a lot more forgiving.

I'm now pro sam altman

Who hates annualized revenue?

Monthly revenue?

State the truth, what revenue you collected last month, the month before, etc. We're not children that need help with arithmetic. We can all multiply by 12, but we don't because it's meaningless. Report the truth. Report what you have already done and leave the "make up new measures that make us look good by pretending we can predict the future" to others.

yeah because every startup that does this is asking for 2trillion dollar evaluation, lol lmao even

The annualized their revenue based on a single day! So yes, total bullshit.

And the sad fact is even though they did this, they were still 20 billion too low.

Not only will this never be an IPO, this is a signal of a collapse of the economy

Not a good day for the entire Nasdaq thanks to Scam A and his magic numbers.

the models are extremely dumb today too, sol 6.1 in particular

Now let's think for a second about why you would ever want to report it that way. There is not one good reason other than hiding your actual measly revenue.