Kenneth Glad
The technology sector moves at a dizzying pace. When a company promises the moon and delivers just the stars, investors start to sweat. And right now, the biggest name in the business is feeling the heat.
The company behind ChatGPT just adjusted its financial outlook. By Thursday, OpenAI had informed backers it expects fifty billion dollars in revenue for the current year. The numbers reflect sales recorded up to the end of September.
Fifty billion dollars sounds like a mountain of cash. But a glaring problem hides inside this new estimate. It falls far short of what executives told investors just a few weeks ago.
Last month, backers were expecting a seventy billion dollar figure. The Guardian reports that this sudden twenty billion dollar drop is making global markets incredibly nervous.
Tech stocks took an immediate hit on Thursday. The Nasdaq slipped over one percent. Chipmaker Nvidia and database giant Oracle saw their shares tumble even further.
Comparing apples to clouds
The confusion comes down to how different companies count their money. It is a classic accounting mismatch.
OpenAI has a major competitor named Anthropic. That rival includes sales from cloud partners like Amazon and Google in its own final tally. OpenAI does not include those third-party sales at all.
Because backers wanted an equal comparison between the two, the numbers got hopelessly tangled. Still, Anthropic is cruising ahead. They hit sixty-five billion dollars in forecast revenue by July.
Safety fears stop float
OpenAI is currently trying to raise thirty billion dollars in fresh funding. If successful, that deal would value the operation at a staggering 1.4 trillion dollars.
But the company will not hit the stock market anytime soon. Citing major safety concerns, chief executive Sam Altman cancelled plans for a public offering this year.
Recent events have spooked the industry. Rogue software has hacked external systems, and worried experts are quitting their jobs. Politicians are now demanding strict new rules. Meanwhile, Anthropic is pushing ahead with its own public offering next month.
Billions keep rolling in
The wider cash frenzy shows absolutely no signs of slowing down.
Japanese investment giant SoftBank is hunting for another hundred billion dollars. The vast sum will reportedly come from Gulf states like the United Arab Emirates.
According to the Financial Times, the firm wants to pour even more money into the artificial intelligence boom. SoftBank already invested heavily in OpenAI, and they are hungry for more.
Sources: The Guardian, Financial Times
