Topline<\/p>\n
Shares of OpenAI\u2019s investors and partners stumbled in early trading on Tuesday, after the Wall Street Journal reported the AI giant missed internal revenue and user growth projections, raising concerns among executives that OpenAI may be unable to pay for future contracts. <\/p>\n
One executive told employees that OpenAI may be unable to fund future computing contracts. <\/p>\n
Getty ImagesKey Facts<\/p>\n
OpenAI missed an internal goal of one billion weekly active users for ChatGPT by the end of 2025, as well as several monthly revenue targets earlier this year after losing some of its market share to Anthropic, the Journal reported<\/a>, citing people familiar with the matter.<\/p>\n Sarah Friar, OpenAI\u2019s chief financial officer, reportedly disclosed to other company leaders concerns the firm may be unable to pay for future computing contracts if revenue growth fails to accelerate.<\/p>\n Friar has also expressed caution about OpenAI\u2019s plans to go public by the end of the year, warning the company may be unable to meet the reporting standards required of a public company, while CEO Sam Altman prefers an aggressive timeline, according to the Journal.<\/p>\n \u201c[This] raises questions about whether [OpenAI] can fulfill its massive infrastructure obligations,\u201d Adam Crisafulli, an analyst for Vital Knowledge, wrote in a note Tuesday.<\/p>\n The report pulled back shares of some of OpenAI\u2019s largest investors and partners, including Nvidia (down 3%), Microsoft (1%), Broadcom (4%), CoreWeave (7.1%), Oracle (6.5%) and SoftBank (11.9%). <\/p>\n Chief Critic<\/p>\n OpenAI spokesperson Steve Sharpe called the Journal\u2019s report \u201cclickbait\u201d in a statement to Forbes. Sharpe said OpenAI\u2019s business is \u201cfiring on all cylinders,\u201d adding its consumer strength is starting to show up in revenue and its enterprise business is \u201cin the best place it has ever been.\u201d<\/p>\n Big Number<\/p>\n $852 billion. That\u2019s what OpenAI\u2019s post-money valuation grew to after a $122 billion funding round in March, following a $110 billion funding round a month earlier. OpenAI reportedly<\/a> now plans to spend roughly $600 billion on computing by 2030, a lower projection after Altman first estimated $1.4 trillion, with revenue expected to exceed $280 billion.<\/p>\n What To Watch For<\/p>\n OpenAI\u2019s long-awaited IPO filing. Friar signaled<\/a> \u201creally strong demand\u201d from individual investors earlier this month, with plans for OpenAI to reserve a portion of shares for retail traders once the company goes public. OpenAI is preparing for an IPO that would value the AI giant at more than $1 trillion, Reuters reported<\/a> in October, making OpenAI one of the largest stock debuts ever.<\/p>\n Key Background<\/p>\n The broader AI market has ramped up over the last year, with several megacap firms planning to spend hundreds of billions of dollars on infrastructure to meet growing demand. Last year, several firms announced<\/a> multi-billion-dollar deals and partnerships with OpenAI, with a $500 billion \u201cStargate\u201d deal between OpenAI, SoftBank and Oracle ranking among the largest. Other deals included a $300 billion contract between OpenAI and Oracle, a $100 billion partnership between OpenAI and Nvidia, a more than $22 billion deal reached between CoreWeave and OpenAI and a $38 billion partnership between Amazon and OpenAI. <\/p>\n Further Reading<\/p>\n OpenAI Misses Key Revenue, User Targets In High-Stakes Sprint Toward IPO<\/a> (Wall Street Journal)<\/p>\n OpenAI And Microsoft End Exclusive Partnership And Revenue Sharing<\/a> (Forbes)<\/p>\n