AI Stocks Tumble as OpenAI Revenue Run Rate Comes In $20 Billion Below Earlier Reports

Key Takeaways

• OpenAI’s annualized revenue reportedly reached approximately $50 billion by the end of September, compared with an earlier widely cited estimate of nearly $70 billion.
• The $20 billion difference appears to reflect contrasting revenue-accounting methods rather than a sudden decline in OpenAI’s sales.
• Nvidia, AMD, Broadcom, Micron and Intel fell sharply as investors questioned whether AI companies can generate enough revenue to support massive infrastructure spending.
• The Nasdaq Composite dropped 1.3%, recording its steepest decline since mid-August.

Artificial intelligence stocks suffered a broad selloff on Thursday after a report indicated that OpenAI’s annualized revenue was about $20 billion lower than a figure circulated only weeks earlier.

The ChatGPT developer’s revenue run rate stood at approximately $50 billion near the end of September, according to financial information reportedly shared with investors. That compared with an earlier estimate of roughly $68 billion to $70 billion, triggering concern about the commercial growth of one of the AI industry’s largest customers and infrastructure spenders.

However, the difference does not appear to represent a $20 billion collapse in revenue. Subsequent reporting indicated that the higher figure had adjusted OpenAI’s results to make them more comparable with rival Anthropic, which applies a different treatment to sales generated through cloud-computing partners.

The distinction did little to calm the stock market. Investors sold chipmakers, cloud infrastructure providers and other companies whose valuations depend heavily on continued AI investment.

OpenAI’s Revenue Run Rate Reaches About $50 Billion

OpenAI’s annualized revenue reportedly approached $50 billion by the end of September. An annualized revenue run rate extrapolates sales from a recent month or quarter across a full year.

It is therefore not the same as audited annual revenue. The calculation can change rapidly, particularly at a fast-growing private company whose subscription, enterprise and application-programming-interface sales fluctuate from month to month.

The figure was nevertheless lower than the nearly $70 billion run rate reported in late September. Investors initially interpreted the difference as evidence that OpenAI’s growth may be falling short of expectations.

The concern was particularly significant because OpenAI is at the center of the AI capital-spending cycle. Its expansion requires advanced processors, high-bandwidth memory, cloud capacity, networking equipment and enormous data centers. Any perceived slowdown in OpenAI’s revenue could raise questions about its ability to finance those commitments.

OpenAI has not publicly provided detailed audited results or commented directly on the reported difference. As a private company, it is not subject to the quarterly disclosure requirements applied to publicly listed businesses.

Why Was the Earlier Estimate $20 Billion Higher?

The reported gap appears to result primarily from methodology rather than deteriorating demand.

The earlier figure of approximately $70 billion was reportedly a “grossed-up” estimate designed to compare OpenAI’s business more directly with Anthropic. The two companies treat revenue generated through cloud partners differently when presenting certain financial metrics to investors.

Anthropic distributes its models through partners such as Amazon Web Services and Google Cloud. Some comparative estimates include a broader portion of the sales generated through those platforms. OpenAI’s approximately $50 billion figure reportedly excludes revenue retained or recorded by its distribution partners.

Both companies may still comply with generally accepted accounting principles in their official financial statements. The difference arises in alternative metrics used to describe growth, particularly annualized or adjusted revenue figures presented by privately held technology companies.

This means the $70 billion figure was not necessarily a formal OpenAI forecast that the company subsequently missed. It was an adjusted estimate using a broader revenue definition.

The market’s reaction nevertheless demonstrates how sensitive AI valuations have become to any suggestion that revenue growth is failing to keep pace with infrastructure spending.

Nvidia, AMD and Other AI Stocks Slide

Semiconductor stocks recorded some of the session’s largest declines as investors reassessed the demand outlook for AI hardware.

Nvidia and AMD both have agreements to supply OpenAI with processors and computing capacity. Broadcom is exposed to demand for custom AI accelerators and networking equipment, while Micron and Sandisk are beneficiaries of the growing need for memory and data storage.

Intel’s decline reflected concern that weaker AI spending could affect demand across the semiconductor industry, including processors used in data-center servers and AI inference systems.

Oracle fell by more than 5%, according to market reports. The cloud provider has made substantial infrastructure commitments associated with OpenAI and other AI customers, making its shares particularly sensitive to questions about whether those customers can support their long-term spending plans.

The Technology Select Sector SPDR Fund dropped 1.8%, its largest daily decline since the middle of September.

Nasdaq Records Its Worst Session Since Mid-August

The technology-heavy Nasdaq Composite declined 1.3% to 27,193.34, its steepest loss since mid-August. The S&P 500 fell 0.5% to 7,765.36, while the Dow Jones Industrial Average gained 0.1% as strength in nontechnology stocks limited the broader market decline.

The S&P 500 information technology sector lost 1.8% and ranked as the weakest of the index’s 11 major sectors. The Philadelphia Semiconductor Index fell approximately 3.4%.

The divergence between the Nasdaq and Dow suggested that Thursday’s decline was primarily a reassessment of the AI trade rather than a marketwide liquidation. Six S&P 500 sectors finished higher, while an exchange-traded fund tracking the index without its technology companies gained about 0.5%.

Why OpenAI’s Revenue Matters to the Entire AI Market

OpenAI has become more than a software developer. Its expansion plans influence demand throughout the AI supply chain.

The company requires GPUs from Nvidia and AMD, cloud services from Microsoft and Oracle, custom chips and networking hardware, as well as memory, storage, power generation and data-center construction.

Investors have awarded elevated valuations to many of these suppliers on the assumption that OpenAI, Anthropic and other model developers will continue expanding rapidly enough to justify hundreds of billions of dollars in infrastructure investment.

A lower revenue estimate therefore raises two related concerns.

First, OpenAI may need more external capital or debt to finance its infrastructure commitments if revenue grows more slowly than anticipated. Second, chip and cloud suppliers could face weaker order growth if AI developers eventually reduce spending to protect cash flow.

The size of OpenAI’s reported revenue remains exceptional for a private technology company. A $50 billion annualized rate would still represent rapid commercial adoption of ChatGPT, enterprise subscriptions and developer services. The market’s concern is not that OpenAI lacks demand, but that its revenue may not be expanding as quickly as the investments built around it.

Was the AI Selloff an Overreaction?

Some analysts argued that the stock-market response overstated the significance of the report.

D.A. Davidson analyst Gil Luria and Neostellar founder Evan Schlossman said the discrepancy appeared to reflect confusion surrounding revenue definitions rather than an actual slowdown in AI usage or demand.

If the $50 billion and $70 billion figures measure revenue differently, comparing them directly gives a misleading impression of OpenAI’s growth. The lower number does not necessarily mean the company lost sales, reduced its outlook or missed an internal target.

Even so, the episode highlights a growing transparency problem. Private AI companies increasingly influence public markets, yet investors have limited access to audited financial statements, standardized metrics or detailed cash-flow information.

That uncertainty encourages sharp market reactions whenever new figures emerge.

Higher Oil Prices and Bond Yields Add Pressure

The OpenAI report was not the only factor weighing on technology stocks.

Brent crude climbed above $104 per barrel as geopolitical tensions renewed concerns about global energy supplies. Meanwhile, the 10-year Treasury yield briefly rose to a multidecade high before retreating to approximately 5.23%.

Higher oil prices can sustain inflation, while elevated Treasury yields reduce the present value of future corporate earnings. Both conditions are particularly challenging for high-valuation technology shares.

The combination of revenue uncertainty, expensive financing and growing AI infrastructure commitments left investors less willing to tolerate aggressive assumptions about future growth.

What Investors Should Watch Next

The key question is whether OpenAI’s underlying growth is slowing or whether Thursday’s selloff resulted almost entirely from inconsistent financial definitions.

Investors will be watching for clearer information about OpenAI’s actual revenue, operating losses, cash consumption and infrastructure obligations. Any future IPO filing would provide much more standardized data than the annualized figures currently circulating among private investors.

Upcoming earnings from Microsoft, Oracle, Nvidia, AMD and major cloud providers will also show whether orders from AI developers remain strong.

For now, the reported $50 billion run rate does not prove that demand for artificial intelligence is weakening. It does, however, expose the increasingly fragile assumptions behind the AI trade. With vast amounts of capital already committed to chips and data centers, investors want evidence that revenue can grow quickly enough to finance the industry’s ambitions.