OpenAI reports steep losses despite quarterly revenue rise
OpenAI's quarterly revenue rose about 50% to $10 billion in the third quarter. However, the group behind ChatGPT continued to post steep operating losses, according to the Wall Street Journal.
OpenAI disclosed steep losses despite a quarterly revenue increase, according to documents reviewed by The Wall Street Journal. The company's adjusted operating margin improved to -109% from -150% in the previous quarter, while its operating losses widened to $10.9 billion from $10.1 billion. The financial scrutiny comes as investors analyze the finances of AI companies, with AI-driven tech giant Anthropic preparing for an IPO that could value it at around $1.4 trillion.
Anthropic aims to sell 825 million shares at a price between $70 and $78 each, with major tech companies such as Google, Nvidia, AMD, and Microsoft investing $26 billion in the private placement. The IPO, the first listing by a leading AI model developer, is seen as a gauge for the longevity of the AI spending boom fueling the US economy.
However, the financial challenges faced by Anthropic highlight investors' concerns over the cost of the AI buildout and financing. Art Hogan, chief market strategist at B. Riley Wealth Management, commented on the listing, stating that investors have been eagerly awaiting Anthropic's debut. The IPO unfolds amid the aftermath of the US midterm elections, where Democrats, more cautious about AI, gained control of both chambers of Congress and pledged to curb President Trump's agenda.
The market saw volatility for AI-related stocks, especially Nvidia, following a spy scandal involving its CEO, Jensen Huang.
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