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The firm behind ChatGPT, the chatbot that took the world by storm last year, OpenAI is continuing to make the news as we start to settle in 2024. OpenAI had a colorful 2023 that saw the firm’s products become a hit with the public and drama that led to the ouster and return of its founder and CEO Sam Altman over the course of a weekend that saw everyone glued to the edge of their seats.
Now, as Altman steps up the narrative for expanding OpenAI’s presence into the capital intensive and technologically complex semiconductor industry, a fresh report suggests that not only might OpenAI bring in $2 billion in revenue this year, but if its plans bear fruit, then its 2025 revenue could very well sit at $4 billion.
OpenAI Got On Track To Cross $2 Billion In Annual Revenue in December, Say Insiders
As compared to publicly traded companies like Microsoft, startups and younger companies like OpenAI often rely on projections when it comes to attracting investor capital. While OpenAI has been up and running and developing artificial intelligence models for years, it was only in 2023 that the firm was able to make the money flow in.
Now, in a little over a year after ChatGPT first caught the public attention, a fresh report in the Financial Times suggests that OpenAI is on track to bring in $2 billion in annual revenue. The publication quotes two company insiders to outline that OpenAI’s revenue run rate crossed a level sufficient to ensure $2 billion in annual revenue in December 2023, and despite the historic milestone, they also believe that OpenAI is moving full speed ahead to double this and cross $4 billion in revenue by the end of next year.
One metric that startups use for evaluation and valuation is run rate, and the insiders suggest that OpenAI’s run rate in December can allow it to cross the $2 billion mark in 2024.
At the heart of OpenAI’s optimism for 2025 are business A.I. users. Enterprise artificial intelligence, which can be utilized in a vast array of industries ranging from fraud detection in finance to research in drug development, disruptions in supply chain management and yield management in semiconductor fabrication, is one of the biggest reasons behind Microsoft’s multi billion dollar commitments to OpenAI.
These also sit right at the heart of Microsoft’s transformation from a consumer focused software firm it was originally set up to an enterprise and cloud computing behemoth that the firm has managed to transform itself under the leadership of its current CEO, Satya Nadella.
However, even while OpenAI is aiming to double its revenue next year, the high costs of developing artificial intelligence models will ensure that its income statements continue to resemble other high growth Silicon Valley startups. Training an A.I. model requires thousands of the latest graphics processing units and high electricity usage – both of which ensure that costs remain high.
Altman is also interested in entering the semiconductor fabrication market, and a growth in public and business usage of genertive artificial intelligence underpins OpenAI’s optimism for its future revenue trajectory. Should OpenAI be able to maintain its Deember revenue run rate this year, then it will join technology behemoths such as Google and Meta to rake in a billion dollars in sales within a decade of having secured funding.
Meta, then called Facebook, first crossed the $1 billion revenue mark in 2010, seven years after Alphabet, then called Google, crossed the milestone in 2003.