alt Hacker NewsOpenAI annualised revenues $20B less than previously signalled
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What’s it called when you misstate revenue while also taking money from investors?
Do you know who is not surprised by this? Ed Zitron, and anyone who has read his articles or anyone who have looked into these companies at any level deeper than "AI do cool things! AI must be good investment! AI must make much money!"
Gift link: https://giftarticle.ft.com/giftarticle/actions/redeem/f77156...
Apparently they overstated revenue in an attempt to try to provide a direct comparison with Anthropic's reported metrics.
From the article: "According to a person with knowledge of the matter, the discrepancy arose from attempts by OpenAI’s own investors to produce a direct comparison with Anthropic’s annualised revenues. The pair calculate the figure in different ways, with Anthropic including the revenue from sales via cloud partners such as AWS and Google Cloud, while OpenAI does not. Efforts to “gross up” OpenAI’s annualised revenue led to reports that the group’s annualised revenue had hit $40bn in August. The company has since told investors its revenues have grown more than 70 per cent, leading to the $70bn figure"
**sorry the gift link can only be viewed 3 times..
> As OpenAI bides its time, the company is engaging in early stage discussions with investors about a potential new funding round. The company could raise around $30 billion, CNBC previously reported, but that figure could change.
I predicted last month when they launched Luna that they had raised more funding and I suspect this tidbit dropped to CNBC is just prepping the public for a fundraising that’s already happened. There will probably be an announcement this month.
Does this align with what Zitron was complaining about? Or is it a broken-clock-right-twice-a-day thing? neutral question.
> OpenAI is under pressure to justify its $852 billion valuation to investors as it gears up for what is widely expected to be a blockbuster IPO. OpenAI confidentially filed its prospectus with regulators in June, and executives have signaled that the company is eyeing a 2027 debut.
> Anthropic is also readying for a major IPO. The company has not officially disclosed when it plans to debut, but it’s been engaging in meetings with prospective investors and is reportedly seeking a $2 trillion valuation. In August, Anthropic told investors that its annualized revenue run rate hit $65 billion at the end of July.
Is 15 billion annualized (30% more) supposed to justify the $1 trillion+ difference between the two valuations sought in any event? Or are Anthropic's numbers better because of margins or something?
For those that care about the truth: This is a non-story.
The $70b estimate was based on a comparison to Anthropic, which includes revenue from cloud providers. OpenAI does not include this in their numbers.
So, the number did not come from OpenAI. It was an accounting mistake made by some investors and media, who did not adjust for this before reporting on it. I see fintwit calling on FT/Axios to issue a retraction; good luck with that.
It sure is interesting to see the rush to judgement in this thread. Another poster correctly pointed out this mistake (now buried under the sea of misinformed posts trending above it.) The Internet is cooked.
The headline should've been "OpenAI annualised revenues $20B less than previously signalled by us". The FT is just reporting high number to create a story, then a low number to create another story.
Sam Altman genuinely needs to be exiled as far away from openai if they want to have a chance with it's rising competitors
“However, the new investor presentation shows close to $30bn annualised revenues in July.”
2.5bn in revenue for all of July. That is a disaster.
Squeaky bum time
OpenAI is just Netscape at this point
Wait… this is about their annualized run rate, not their actual annual recurring revenue?
Even their hokey run rate figure is falling?
As NVIDIA hits it's highest price per share... like clockwork.
Honest question, everyone really hates annualized revenue, but how else do you measure the revenue for a company that is (presumably) growing so much month over month? You can't just state revenue projections because they are growing too fast for them to ever make much sense.
Obviously for fast-growing companies, they always want to overstate their success to get that next bit of funding (or in OAI, Anthropic's case justify their existing valuation), so what metric should they share to investors?
I'm waiting for the IPO; I was hoping we'd see less news like this prior. I'm not sure if plain shorting, or puts are the correct action; I suspect the former, as timing the latter is not reliable.
>> "Oracle ... and other artificial intelligence companies"
Uhm, that's definitely not their business, despite what they want to you to believe.
You don’t say…
Anyway, if I had a hundred bucks to burn, I’d bet this is a move to undermine Anthropic’s IPO.
Is there any understanding of how it's even 50b? Makes no sense to me.
Phone call for Ms. Friar.
It's funny because this is the same thing that startups do all the time
The crash of AI hype will be absolutely beautiful. Sure my 401K will probably tank, but this is honestly not the first time. Have plenty of assets not tied to stock market plus plenty of cash.
Although, I suppose that saying, "the market can remain irrational longer than you can be solvent", is more true than ever.
Does any company besides OpenAI get to misreport $20b in revenue and still get taken seriously?
Annualised revenue is bullshit revenue for the gullible.
My anuallized revenue is about 4.5M. I just need now to get a salary every day.
“Annualized revenues” is the same as “oh you got married? At this rate by next year you’ll have 500 husbands”
There is a reason we consider annual results. A year is a natural complete cycle. There isn’t equal amount of demand in January as in June for almost any product.
So taking one good week and multiplying it by 52 (or 4 x 13 as the case may be) is at least naïve and realistically — deceptive.
This is an interesting shift compared to the past where OpenAI would’ve been public a long time ago (due to various regulations) so we would have much more direct insight.
Right now we have a ~$1 trillion company which a ton of the “economy” and valuations are based on, with near zero information on how it’s doing.