Open AI revenue run rate $20Bn for 2025

Sources: Twitter, Seeking Alpha

OpenAI (OPENAI) CEO, Sam Altman said on Thursday that the ChatGPT maker is likely to end the year with more than $20B in annualized revenue run rate, and that sales could surge even higher in the coming years. Just a few months back, estimates were for a $13Bn run rate, so this is a surprise.

Clearly, OpenAI is under pressure to show justification for the massive commitments it has made to buy computing power. Is it spin, or a bubble ? My take is a little different - this is an arms race, unfortunately and there is no way you can do it without spending a boatload of money, especially when other sovereign governments are involved, especially China’s. We may not be hearing out massive deals from individual companies with such massive outlays, but it would be impossible to believe that China is not spending on AI - be it infrastructure, data centers, LLMs, Deep Research, GPUs - basically, whatever it takes. Jensen Huang, CEO of Nvidia said yesterday that China has ample power, while the US is scrambling with a 36 month wait for grid connectivity. The US is finally spending on infrastructure, which it should never have neglected in the past 2-3 decades.

Simply, the US cannot afford not to spend, when it has already given away the lead in manufacturing, infrastructure, rare earths and so on…chip design and entrepreneurial capital are its only moats. Whether it is the Chinese government actively promoting its interest through businessmen aligned closely with national interests, or business man Sam Altman wanting US government support, it doesn't matter, who's leading whom. I honestly can't see the US beating China without government help, and if it the idea comes from OpenAI, what different does it make?

Yes, I am cognizant and aware of high valuations, just like Michael Burry, and understand the need to constantly hedge but this is likely to continue till there is a better, cheaper way - I can’t see anyone turning back unless the money spigots are turned off. 

OpenAI’s CFO talked about government involvement but quickly backed off, but I don’t think it is unreasonable to get government help. The entire AI sector is going to need it.

More from Sam Altman's post on X.

“We expect to end this year above $20 billion in annualized revenue run rate and grow to hundreds of billion by 2030,” Altman said in a lengthy post on X, addressing some concerns about the company's financial health, as well as comments made by its CFO and the topic of government financing. “We are looking at commitments of about $1.4 trillion over the next 8 years,” he continued. “Obviously this requires continued revenue growth, and each doubling is a lot of work! But we are feeling good about our prospects there; we are quite excited about our upcoming enterprise offering for example, and there are categories like new consumer devices and robotics that we also expect to be very significant.” Altman had appeared on a podcast recently and said the company was doing “well more” than $13B in revenue and hinted it was on track to hit $100B in revenue in 2027. Altman also addressed the fact that there are new categories that will need AI, such as scientific discovery, that OpenAI has a “hard time putting specifics on.” He also noted that the ChatGPT maker is looking at ways to sell more compute capacity directly to other companies and people and suggested the company may raise more funds in the future. “But everything we currently see suggests that the world is going to need a great deal more computing power than what we are already planning for,” Altman added. He also touched on a couple of other topics and said that OpenAI is unequivocally not trying to become too big to fail and does not believe that the government should pick winners and losers. “We plan to be a wildly successful company, but if we get it wrong, that’s on us,” Altman explained. “Our CFO [Sarah Friar] talked about government financing yesterday, and then later clarified her point underscoring that she could have phrased things more clearly. As mentioned above, we think that the US government should have a national strategy for its own AI infrastructure.” Lastly, Altman said that OpenAI is spending so much now — including recent deals with Nvidia (NVDA), AMD (AMD), Oracle (ORCL) and others — because it is trying to build the infrastructure for a future that is powered by AI. “Massive infrastructure projects take quite awhile to build, so we have to start now,” Altman continued. “Based on the trends we are seeing of how people are using AI and how much of it they would like to use, we believe the risk to OpenAI of not having enough computing power is more significant and more likely than the risk of having too much. Even today, we and others have to rate limit our products and not offer new features and models because we face such a severe compute constraint. In a world where AI can make important scientific breakthroughs but at the cost of tremendous amounts of computing power, we want to be ready to meet that moment. And we no longer think it’s in the distant future.”