OpenAI, which is pursuing an initial public offering this year, has missed major performance targets for last year and this year, raising concerns ahead of the IPO, The Wall Street Journal reported Sunday, citing sources.
According to the report, OpenAI failed to meet an internal goal of reaching 1 billion weekly active users for its AI model ChatGPT by the end of last year, a shortfall the Journal said has worried investors. Sources also said OpenAI missed its annual revenue target last year as Google’s competing AI model Gemini grew rapidly. This year, OpenAI has also reportedly missed monthly revenue targets multiple times, which sources attributed to customers shifting to Anthropic, the developer of “Claude,” in coding and enterprise AI business lines.
The misses have added scrutiny to OpenAI’s finances as it prepares for an IPO and signals heavy spending. OpenAI completed what it described as Silicon Valley’s largest funding round last month, raising $122 billion and receiving a valuation of $852 billion. But it has also indicated it expects to spend $600 billion through 2030 to secure computing resources such as data centers, heightening funding concerns as targets slip.
Sources said OpenAI Chief Financial Officer Sarah Friar recently told industry contacts that if revenue does not grow fast enough, the company may not be able to finance future computing resources. The board has also closely reviewed OpenAI’s data center contracts and has questioned CEO Sam Altman’s push to secure more computing capacity despite a business slowdown, the sources said.
The Journal reported that the board is split between Altman’s goal of completing an IPO by the end of this year and other executives who want to prioritize cost controls. Sources said Friar has expressed caution in recent months about pursuing an IPO by year’s end.
Altman and Friar denied reports of internal disagreement in a joint statement, the Journal said, saying, “We are fully aligned on securing as much computing capacity as possible, and we work together every day to make that happen.”
OpenAI has also taken steps to cut costs, including ending its video AI model service “Sora.” Separately, Reuters reported Sunday that OpenAI renegotiated contract terms with major shareholder Microsoft and will be able to offer its products not only on Microsoft’s cloud but also on rival services including Amazon Web Services and Google Cloud. In addition, TF International Securities analyst Ming-Chi Kuo, known for Apple supply-chain analysis, said the day before that OpenAI is pursuing development of its own smartphone.
The Journal said OpenAI is also facing other challenges ahead of its planned IPO, including a leadership gap after Product and Business Chief Fidji Simo, described as the company’s No. 2 executive, took an abrupt medical leave earlier this month, as well as litigation involving Tesla CEO Elon Musk, an OpenAI co-founder.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.