OpenAI is already close to $2 bn in revenue as growth skyrockets, had managed $1 bn last year

OpenAI has achieved a remarkable milestone, with its annualised revenues crossing the $2 billion mark, driven primarily by the widespread adoption of its leading artificial intelligence product, ChatGPT. This success propels OpenAI into the ranks of the fastest-growing technology companies in history.

According to sources familiar with the company’s finances, OpenAI reached the $2 billion annualized revenue milestone in December 2023. Buoyed by robust interest from business clients keen on integrating generative AI tools into their workflows, the company aims to more than double this figure by 2025.

This exponential growth trajectory positions OpenAI alongside esteemed Silicon Valley counterparts like Google and Meta, achieving revenues of $1 billion within a decade of its inception. Originally established as a not-for-profit AI research lab in 2015, OpenAI transitioned into a commercial powerhouse after establishing a business arm in 2020.

Despite internal disruptions in November, including the temporary ousting and subsequent reinstatement of CEO Sam Altman, OpenAI has continued to capitalize on the AI boom ignited by the launch of ChatGPT in November 2022.

Altman revealed that as of November last year, a staggering 92 per cent of Fortune 500 companies were leveraging OpenAI’s suite of products, with ChatGPT boasting 100 million weekly users. The surge in consumer and business interest in generative AI, capable of producing code, text, images, and video, has been a driving force behind OpenAI’s meteoric rise.

Competitors, ranging from tech giants like Google and Meta to startups such as Anthropic, Mistral, and Cohere, are also entering the fray with their AI offerings. Notably, Google recently unveiled its AI system Gemini, accessible through a premium subscription model.

Despite its soaring revenues, OpenAI remains in the red due to substantial investments in developing and maintaining its AI models. Altman emphasized the deliberate nature of these expenses, acknowledging that training costs are substantial and expected to outpace revenue growth as the company pursues more sophisticated models. Meeting these financial demands may necessitate raising tens of billions more in funding.

OpenAI’s strategic alliance with major investor Microsoft, which has pledged up to $13 billion, has been instrumental in propelling both companies to the forefront of the AI revolution. Microsoft’s AI Copilot, powered by OpenAI’s models, is gaining traction among enterprise users of Microsoft 365, with over 18,000 customers purchasing OpenAI software through the Azure platform.

In a bid to further bolster its operations, Altman is exploring avenues to enhance semiconductor supply, crucial for AI companies striving to develop cutting-edge models and reduce costs. This commitment underscores OpenAI’s determination to shape the future of AI while contributing to economic competitiveness.

(With inputs from agencies)