ChatGPT maker OpenAI has fallen short of internal targets for revenue and user growth as it gears up for a potential stock market listing, triggering nervousness among investors over the pace of its expansion.
The LLM giant missed its goal of reaching one billion weekly active users by the end of last year, according to the Wall Street Journal, and also failed to hit its annual revenue target.
The report showed the tech darling also missed various monthly revenue targets earlier on in the year, and is facing higher than expected subscriber churn.
The misses come as OpenAI, which has raised over $120bn at a valuation of around $852bn, prepares for a potential mega IPO later this year.
CFO flags risks over spending and IPO timing
Senior executives are reportedly concerns about whether the firm’s growth is keeping pace with mass spending.
Chief financial officer Sarah Friar warned colleagues that OpenAI may struggle to front future computing costs, if revenues don’t accelerate soon.
The firm has committed to huge investment in data centres and infrastructure, but the slumping user growth and monetisation has triggered scrutiny from board members.
Meanwhile, directors have looked into major data centre deals and questioned continued expansion plans as the business confronts softer growth.
OpenAI has also lost ground in parts of the coding markets to intensifying competition, as especially to rivals like Anthropic and Google’s Gemini, whose growth undoubtedly contributed to missed sale targets.
However, OpenAI said it remains committed to the expansion of its compute, with chief executive Sam Altman and Friar claiming they remain “aligned on buying as much compute as we can”.
OpenAI breaks up with Microsoft
Alongside the slowdown, OpenAI has also moved to reset its relationship with Microsoft, its biggest strategic partner.
Under newly renegotiated terms, Microsoft will no longer have exclusive access to OpenAI’s models and intellectual property.
Instead, it will hold a non-exclusive licence through 2032, while remaining the company’s “primary cloud partner” via Azure.
The change removes a key obstacle tied to OpenAI’s separate deal with Amazon, which had created potential legal tensions over cloud exclusivity.
Microsoft, which owns roughly a quarter of OpenAI’s for-profit arm, is expected to continue generating billions from the partnership, though it gives up some exclusivity in return.
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