OpenAI Revenue Climbs to $10 Billion as Losses Widen, Ahead of Anthropic IPO

OpenAI’s third-quarter revenue rose about 50% to $10 billion, though its operating losses grew to $10.9 billion, according to documents reviewed by the Wall Street Journal.

Revenue up, losses still deep

OpenAI’s quarterly revenue climbed roughly 50% to $10 billion in the third quarter, yet the company continued to record heavy operating losses, according to investor documents reviewed by the Wall Street Journal. The figures suggest the ChatGPT maker is growing its top line quickly while remaining far from profitability.

The company told investors that its adjusted operating margin improved to -109% in the third quarter, up from -150% in the previous quarter. Even so, its operating losses widened to $10.9 billion from $10.1 billion over the same period, a reminder that margin improvement and absolute losses can move in different directions as sales expand.

Competition with Anthropic

The results arrived as investors weigh the finances of AI developers closely. Rival Anthropic, maker of the Claude chatbot, is preparing an initial public offering that could value the startup at about $1.4 trillion, and it has begun a roadshow for the share sale. Anthropic recently disclosed third-quarter revenue of $17 billion and a smaller operating loss of $567 million, a comparison that puts OpenAI’s performance in sharper focus.

OpenAI is working to close that gap, particularly in the enterprise market for AI products, where businesses are an increasingly important source of sales. The company has reduced prices on its latest models to win market share and recently appointed Dali Rajic as chief revenue officer to lead that effort.

OpenAI Revenue Climbs to $10 Billion as Losses Widen, Ahead of Anthropic IPO — Anthropic — Photo: Department for Science, Innovation and Technology / Wikimedia Commons (CC BY 2.0)

Investor appetite persists

Analysts and investors have long tolerated heavy spending by AI companies in exchange for expected long-term returns, and the Anthropic offering is widely seen as a benchmark for the sector. Strong demand for the share sale would signal that appetite for AI companies remains intact despite questions about profitability.

Background

OpenAI did not immediately respond to a request for comment from Reuters. The Wall Street Journal, which first reported the figures, is owned by News Corp, which has a content-licensing partnership with OpenAI.

What next

Attention now turns to Anthropic’s IPO, expected next week, and to whether OpenAI’s enterprise push and price cuts can narrow the revenue and loss gap between the two companies.