Tech stocks slide as report of OpenAI revenue miss rattles investors
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The news: Tech stocks slid as a Wall Street Journal report that OpenAI had missed its own revenue and user growth targets rattled investors across the AI sector.
The numbers: Oracle were trading 3.4% lower in the early afternoon in New York. CoreWeave was down 2.8% and Arm Holdings down 6.3%. SoftBank, which has a stake of about 11% in OpenAI fell 9.9% in Tokyo. Nvidia was down over 3%, and the Nasdaq composite was 1.3% lower.
The context: The Journal reported that CFO Sarah Friar told other company leaders she was worried OpenAI might not be able to pay for future computing contracts if revenue didn’t grow fast enough.
According to the report, board directors had also more closely examined the company’s data-centre deals in recent months and questioned Altman’s efforts to secure even more computing power despite the business slowdown.
OpenAI missed its internal goal of one billion weekly active ChatGPT users by end of last year, the Journal’s sources said. It also missed its yearly revenue target after Google’s Gemini saw massive growth late last year and ate into its market share, those people added. Monthly revenue targets earlier this year were also missed, after OpenAI lost ground to Anthropic in coding and enterprise markets.
“Friar and other executives are now seeking to control costs and instill more discipline in the business, at times putting them at odds with their CEO,” the Journal said.
What they said: In a statement to media, OpenAI pushed back, calling the report “prime clickbait” and saying its businesses were “firing on all cylinders.”
“The mood internally is incredibly positive,” the company said.
Altman and Friar rejected suggestions they were divided over computing spending, telling CNBC in a joint statement it was “ridiculous” and that they were “totally aligned on buying as much compute as we can.”
The sources: The Wall Street Journal, CNBC, Bloomberg
