A Major Milestone Hit by OpenAI
OpenAI, a leading artificial intelligence company, has achieved a remarkable milestone, surpassing $2 billion in annualized revenue. The company’s flagship product, ChatGPT, has driven this extraordinary growth, positioning OpenAI among the fastest-growing technology companies in history.
Based in San Francisco, OpenAI reached the $2 billion yearly run rate milestone in December 2023, according to sources familiar with its financial performance. Moreover, the company aims to more than double this figure by 2025, fueled by robust interest from business clients eager to leverage generative AI tools in their operations.
This exponential growth places OpenAI in elite company, alongside Silicon Valley giants like Google and Meta, which achieved $1 billion in revenue within a decade of their founding.
Initially established as a not-for-profit AI research lab in 2015, OpenAI pivoted to commercial operations in 2020. Since then, its revenue trajectory has skyrocketed, with a reported annualized revenue of $1.3 billion in October 2023.
WATCH: As reports suggested that Microsoft-backed OpenAI hit the $2 billion revenue milestone in December, its chief Sam Altman is in talks with investors, including the UAE, to raise funds for a tech initiative to boost the world's chip-building capacity https://t.co/b0cjdMPkmA pic.twitter.com/KHCcn0UTrd
— Reuters Business (@ReutersBiz) February 9, 2024
Despite internal upheavals, including the brief ousting and reinstatement of CEO Sam Altman in November, OpenAI continues to thrive in the AI market. ChatGPT, launched in November 2022, has garnered widespread adoption, with 92% of Fortune 500 companies utilizing OpenAI products. The chatbot alone boasts 100 million weekly users.
Interest in generative AI has surged among consumers and businesses alike, driving competition from industry rivals and startups alike. OpenAI remains loss-making due to substantial investments in model development and operation costs. Altman acknowledges these expenses but emphasizes their strategic importance.
Microsoft, OpenAI’s primary backer, has pledged up to $13 billion to support the company’s growth, solidifying their partnership at the forefront of the AI landscape. OpenAI’s models also power Microsoft’s AI Copilot, an AI assistant integrated into Microsoft 365 for enterprise users.
In a recent stock sale, OpenAI’s valuation soared to $86 billion, underscoring investor confidence in its future prospects. Altman is also exploring strategies to enhance semiconductor supply, which is critical for AI model development.