The company behind ChatGPT- OpenAI, recently claimed to have hit $10B in annual revenue. This has to be a major milestone! The company has made that amount through it’s core products. In 2022, ChatGPT was launched, and now it has an annual revenue of $10B. This is nothing short of impressive, what’s short is the time- all of this in just in 3 years!
So, where is all this money coming from? Let’s break it down.
Revenue Breakdown: How OpenAI Makes Its Money
According to some sources, OpenAI earns its $10 billion annual revenue (ARR) from three major sources:
1. Consumer Subscriptions
Millions of people pay for ChatGPT Plus, which is not surprising as it gives them access to more powerful AI models like GPT-4o. And these individual subscribers make up a large pool of revenue for OpenAI.
2. Business and Education Plans
According to the company, it has over 3 million paying business customers. Which includes businesses that incorporate AI in their work to boost productivity. Additionally, schools and universities are integrating AI into learning.
3. API Sales to Developers
If you aren’t aware of this yet, OpenAI also sells access to its models through its API. The same is used by developers and startups to build their apps and products.
What’s not included?
This $10 billion annual revenue (ARR) doesn’t include licensing deals like the one with Microsoft. Or even any other one-time agreements. Which just implies that the actual total is actually even higher.
Fast Growth, High Costs
As reported by TechCrunch, OpenAI’s revenue last month was around $5.5 billion. And in one year, it has doubled it’s revenue. That’s an incredible pace, but obviously not without hurdles.
To operate on such a large scale and that too world wide, OpenAI spends a lot of money. Like on cloud infrastructure, hiring top talent, and on developing new AI systems. And some sources say that while it had a revenue of around $5.5 billion it also lost around $5 billion the same year.
Additionally, to keep up with the growth and scaling, OpenAI earlier this year, raised 40 billion in funding, as reported by CNBC. Which has been the the largest private tech deal yet. The funding does two things- it gives them the push to grow and at the same time also puts pressure on them to keep delivering results.
The Big Goal: $125 Billion by 2029
With the raising of funds, OpenAI has made one thing quite obvious- it’s not stopping at $10B. The company has set a big goal of reaching $125 billion in revenue by 2029, which is just 4 years away. They might get there, if they continue rolling out amazing features like GPT-4o, deep research, tools etc.
Over 500 Million People Use ChatGPT Weekly
OpenAI’s tools are not just for big companies. It’s for everyone and for everyday use. From students, to writers to engineers, everyone uses ChatGPT. This kind of global reach gives OpenAI a strong position as the leader in AI tools. Furthermore, it also explains how it has scaled up so fast.
OpenAI’s soaring user base reflects not just popularity but serious investor confidence too. The company recently secured a $300 billion valuation, here’s how that deal came together.
