Tech stocks drop after report that OpenAI’s revenue is lower than expected
CNN • • business
Key Points:
- Tech stocks fell sharply after a report revealed OpenAI’s annualized revenue is about $50 billion, significantly lower than the previously reported $70 billion figure, causing investor concern about AI market demand and profitability.
- The Nasdaq Composite dropped 1.25%, its worst decline since mid-August, while the S&P 500 fell 0.5%, with major tech companies like Nvidia, Intel, and Oracle experiencing notable losses.
- The $70 billion revenue figure likely originated from firms comparing OpenAI to Anthropic, which reports gross revenue, whereas OpenAI’s $50 billion is based on net revenue, according to a source familiar with the documents.
- Investor confidence in the AI sector, which has buoyed the stock market recently, may be shaken by the lower revenue numbers, potentially impacting the entire AI supply chain and related tech sub-industries.
- OpenAI CEO Sam Altman recently announced a delay in the company’s initial public offering until at least next year, citing AI safety concerns.
