Newsletter
OpenAI’s quarterly revenue reached $10 billion for the first time, but the company still lost more money than it earned.
What happened: revenue increased nearly 50% from the previous quarter and almost tripled from last year.
Note: the numbers were reportedly shared with investors during a call on Tuesday. OpenAI has not publicly released the results or commented on the reports.
By the numbers:
- Operating loss at $10.9 billion, up from $10.1 billion.
- Operating margin at -109%, compared with -150% in Q2
- Annualised revenue at roughly $50 billion at the end of September
A -109% operating margin means OpenAI lost around $109 from its regular business operations for every $100 it earned.
So, while the company is still burning a lot of money, the loss compared with its revenue has reduced. That is why its operating margin improved from -150% to -109%, even though the total loss increased. moneycontrol.com
Why the massive losses: building AI is extremely expensive.
OpenAI must purchase computing power, rent data-centre capacity, train new models and pay for the chips required to run ChatGPT for more than a billion weekly users.
The adjusted loss also reportedly excludes $2.6 billion in employee stock-based compensation, which is the value of shares given to employees as part of their pay. wsj.com
Where is the growth coming from: demand improved for OpenAI’s newer models and business products.
The company has also lowered prices and increased its focus on AI agents—tools that can complete tasks instead of merely answering questions.
Its enterprise business reportedly doubled during the quarter and now contributes most of its revenue. Nearly 100 million people were paying to use OpenAI’s products, although that remains a small portion of its 1.2 billion weekly users.
A quick clarification: the $50 billion annualised revenue figure does not mean OpenAI earned $50 billion during the year.
It estimates what the company could earn over 12 months if its revenue at the end of September continued at the same pace. It is useful for showing momentum, but it is not the same as actual yearly sales.
The money angle: OpenAI is completing a new funding round at a reported valuation of $1.25 trillion.
It has reportedly raised the first $11 billion of the round after delaying its stock-market listing plans until next year. The fresh money will help finance its enormous computing and infrastructure requirements.
OpenAI is also entering travel: longside the financial update, OpenAI has acquired Odessia, a young AI travel startup founded by Francis Davidson.
Odessia allowed users to plan and organise trips through an AI travel agent. It had raised $6 million in early funding led by Sequoia and launched its product only around five months ago.
The purchase price has not been disclosed.
OpenAI is also entering travel: alongside the financial update, OpenAI has acquired Odessia, a young AI travel startup founded by Francis Davidson.
Odessia allowed users to plan and organise trips through an AI travel agent. It had raised $6 million in early funding led by Sequoia and launched its product only around five months ago.
The purchase price has not been disclosed.
Zoom out: OpenAI’s Q3 numbers show the two sides of the AI boom.
Revenue is growing quickly as more consumers and companies pay for AI. But serving those users and building better models still costs even more.
The Odessia deal shows where OpenAI may look for its next phase of growth: specialised AI agents that do the work for users—in this case, potentially planning a trip from start to finish.
