The AI revenue race heats up: OpenAI expecting $12.7 billion this year; Anthropic cuts deal with Databricks
Revenue projections are rosy, but companies are still burning huge piles of investor cash.
AI companies have been burning hundreds of billions of investors’ dollars to grow their businesses, trying to figure out the business model along the way. Just today, it was reported that OpenAI is finalizing a $40 billion funding round led by SoftBank with a valuation of $300 billion.
Bloomberg reports that OpenAI is expecting its revenue to triple this year to $12.7 billion. Last year, the ChatGPT maker pulled in $3.7 billion in revenue, according to the report. Recently, The New York Times reported that the company was on track to lose $5 billion in 2024. Microsoft has invested $13 billion in OpenAI.
OpenAI came to market early with its $20 per month subscription to ChatGPT, a price that doesn’t seem to match up with the operating costs for the service.
OpenAI CEO Sam Altman revealed recently that the company is losing money on its $200 per month ChatGPT Pro subscription, saying that “people use it much more than we expected.”
no, i personally chose the price and thought we would make some money
— Sam Altman (@sama) January 6, 2025
There are also paid ChatGPT plans for teams, enterprise, and education.
The Information recently reported that OpenAI was also considering charging $20,000 per month for “PhD-level agents.”
The cost of running ChatGPT services is likely to spike as all models going forward will be “reasoning” models, which take more expensive computing time to mull a problem and appear to increase the performance of the model. But it’s far from certain that the current product pricing will cover these huge costs.
Anthropic + Databricks
At least OpenAI is pulling in some serious cash. Competitor Anthropic is still playing catch-up with OpenAI and is also on a quest for revenue.
The Information reported that Anthropic is making about $115 million per month, a little more than one-third of what OpenAI is making, and the company burned $6.5 billion in cash last year.
To help juice that revenue, The Wall Street Journal is reporting that Anthropic has struck a five-year, $100 million deal to sell AI services to Databricks’ business customers.
Earlier this month, Anthropic said it raised another $3.5 billion, with a valuation of $61.5 billion. Founded by former OpenAI executives, the company has raised $8 billion from Amazon and expects to grow revenue to $34.5 billion by 2027.
