For anybody who thought AI companies were about to unlock trillions of dollars in profits, OpenAI has bad news for you: it ain’t happening anytime soon.
Some red-hot reporting from the Financial Times just revealed that OpenAI’s annualized revenue — an estimated guess at a company’s income for the year — is roughly $20 billion lower than anybody had previously expected, including, it seems, OpenAI itself.
Because OpenAI is a private company, it’s important to note that we don’t know for sure what’s going on under the hood. That said, the FT based its reporting on internal memos to investors issued in late September. Basically, the AI lab told backers to expect revenues approaching $50 billion — far shorter than the explosive $70 billion number reported previously.
Though that $70 billion figure was also based on leaked investor memos, OpenAI wasn’t in any hurry to deny it, digging itself into a $20 billion hole. Given the monumental difference between those two figures, investors across the world of finance are taking it as a sign that demand for AI is much lower than previously thought — a signal with ripple effects that extend far beyond OpenAI.
At the closing bells on Wall Street on Thursday, the tech-heavy Nasdaq index was down a whopping 1.25 percent on the day, while the S&P 500 fell by 0.47 percent.
Particularly hard hit were companies sandwiched in the middle of the AI supply-chain, like the chipmaker Nvidia, which tumbled by nearly 3 percent following the news from the FT.
All of this comes a week after consulting firm Bain and Co issued a gloomy report finding that the global AI industry would have to reach annual revenue of $6 trillion by 2031 to justify the amount of spending on AI data centers — a formidable summit, which is now $20 billion farther after the latest disclosures.
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