"OpenAI's Third-Quarter Revenue Surges 50%... Losses Widen, Too"

Funding race ahead of Anthropic's IPO
Paid subscription growth strategy... expected to improve profitability

Reuters-Yonhap News

OpenAI continued to grow, reporting revenue of $10 billion in the third quarter of this year. However, despite the sharp increase in revenue, its operating loss widened.

According to The Wall Street Journal (WSJ), Bloomberg and other outlets, OpenAI reported third-quarter revenue of $10 billion, up about 50% from the previous quarter. Its adjusted operating margin also improved from -150% in the second quarter to -109% in the third. However, the adjusted operating loss calculated from those figures edged up from $10.1 billion to $10.9 billion.

The WSJ, citing people familiar with the matter, reported that stock-based compensation was excluded from the operating loss figures. OpenAI's stock-based compensation rose to $2.6 billion in the third quarter. By contrast, Anthropic's reported operating loss includes stock-based compensation.

OpenAI is engaged in fierce competition to catch up with Anthropic in the lucrative enterprise AI market. It has also cut prices for its latest AI models to expand its market share. Recently, it hired Dali Rajic as its new chief revenue officer (CRO) to focus on its enterprise AI business. The enterprise business's share of total revenue has been steadily increasing.

The number of paid ChatGPT users has also grown to about 100 million, equivalent to 8.5% of its total weekly active users. The share of paid users edged up from the previous quarter. This suggests that OpenAI's strategy to expand paid subscriptions for the world's most popular consumer chatbot is paying off. Earlier this year, OpenAI introduced advertising on ChatGPT. The company expects this to improve profitability, although the specific performance of its advertising business has not been disclosed.

OpenAI is maintaining a large-scale consumer business while conducting research and development in a range of fields, from robotics to image generation. Anthropic, by contrast, is pursuing a strategy focused more heavily on developing AI for enterprise customers. One consequence, however, is that its revenue is relatively concentrated among enterprise clients.

In its latest fundraising round, OpenAI secured less than half of the $30 billion it had initially targeted. This is thought to reflect cooling investor sentiment toward the AI industry. The company is seeking additional investors to reach its target.

This content was produced with the assistance of AI translation services.