Tech stocks drop after report that OpenAI’s revenue is lower than expected

Tech stocks dropped on Thursday after a news report that OpenAI’s annualized revenue is about $20 billion less than previously reported. OpenAI, the maker of ChatGPT, recently told investors that its annualized revenue was nearing $50 billion, according to the Financial Times, lower than the $70 billion figure previously reported by media, including the FT, based on information from investors. The discrepancy could rattle investors already questioning whether demand for AI will be strong enough to help companies like OpenAI and Anthropic turn a profit and justify the industry’s enormous spending on the AI buildout. The Nasdaq Composite sank 1.4%, on pace for its worst day since July. The Nasdaq had opened lower but declines accelerated after the FT report published midday. A source familiar with the documents said the $70 billion figure did not come from OpenAI and likely came from a desire by firms to compare OpenAI’s numbers with Anthropic’s, which includes gross revenue from cloud providers. OpenAI’s is based on net revenue. OpenAI declined to comment. There was selling across semiconductor chipmakers, cloud providers and other tech companies involved in the AI buildout. Nvidia shares (NVDA) fell 3%, while Intel (INTC) and Oracle (ORCL) each fell 6%. OpenAI CEO Sam Altman announced in September that the company would postpone its initial public offering until at least next year, citing concerns about AI safety. Anthropic is expected to launch its IPO later this fall, reportedly seeking a $2 trillion valuation. In August, Bloomberg and Reuters reported the company is on track to generate an annualized revenue run rate of more than $65 billion. This is a developing story and will be updated.