(Sherwood News)

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.

3/27/25 2:18PM

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.

Rani Molla

BofA doesn’t expect Tesla’s ride-share service to have an impact on Uber or Lyft this year

Analysts at Bank of America Global Research compared Tesla’s new Bay Area ride-sharing service with its rivals and found that, for now, it’s not much competition for Uber and Lyft. “Tesla scale in SF is still small, and we don’t expect impact on Uber/Lyft financial performance in ’25,” they wrote.

Tesla is operating an unknown number of cars with drivers using supervised full self-driving in the Bay Area, and roughly 30 autonomous robotaxis in Austin. The company has allowed the public to download its Robotaxi app and join a waitlist, but it hasn’t said how many people have been let in off that waitlist.

While the analysts found that Tesla ride-shares are cheaper than traditional ride-share services like Uber and Lyft, the wait times are a lot longer (nine-minute wait times on average, when cars were available at all) and the process has more friction. They also said the “nature of [a] Tesla FSD ‘driver’ is slightly more aggressive than a Waymo,” the Google-owned company that’s currently operating 800 vehicles in the Bay Area.

Apple AI was MIA at iPhone event

A year and a half into a bungled rollout of AI into Apple’s products, Apple Intelligence was barely mentioned at the “Awe Dropping” event.

Jon Keegan9/10/25

Jon Keegan

9/10/25

Oracle’s massive sales backlog is thanks to a $300 billion deal with OpenAI, WSJ reports

OpenAI has signed a massive deal to purchase $300 billion worth of cloud computing capacity from Oracle, according to a report from The Wall Street Journal.

The report notes that the five-year deal would be one of the largest cloud computing contracts ever signed, requiring 4.5 gigawatts of capacity.

The news is prompting shares to pare some of their massive gains, presumably because of concerns about counterparty and concentration risk.

Yesterday, Oracle shares skyrocketed as much as 30% in after-hours trading after the company forecast that it expects its cloud infrastructure business to see revenues climb to $144 billion by 2030.

Oracle shares were up as much as 43% on Wednesday.

It’s the second example in under a week of how much OpenAI’s cash burn and fundraising efforts are playing a starring role in the AI boom: the Financial Times reported that OpenAI is also the major new Broadcom customer that has placed $10 billion in orders.

Exclusive | Oracle, OpenAI Sign Massive $300 Billion Cloud Computing Deal

Yesterday, Oracle shares skyrocketed as much as 30% in after-hours trading after the company forecast that it expects its cloud infrastructure business to see revenues climb to $144 billion by 2030.

Oracle shares were up as much as 43% on Wednesday.

Large companies have started to drop AI from their businesses

Census data shows drop in large companies using AI

AI appears to be everywhere, but that doesn’t mean big companies have fully embraced the use of the technology in their day-to-day business.

Claire Yubin Oh, Jon Keegan9/10/25

Jon Keegan

9/9/25

Report: Microsoft adds Anthropic alongside OpenAI in Office 365, citing better performance

In a move that could test its fraught $13 billion partnership, Microsoft is moving away from relying solely on OpenAI to power its AI features in Office 365 and will now also include Anthropic’s Claude Sonnet 4 model, according to a report from The Information.

The move is a tectonic shift that boosts Anthropic’s standing, heightens risks for OpenAI, and has huge ramifications for the balance of power in the fast-moving AI field.

Per the report, Microsoft executives found that Anthropic’s AI outperformed OpenAI’s on tasks involving spreadsheets and generating PowerPoint slide decks, both crucial parts of Microsoft’s Office 365 productivity suite.

Microsoft will have to pay the competition to provide the services —Amazon Web Services currently hosts Anthropic’s models while Microsoft’s Azure cloud service does not, The Information reported.

OpenAI is also reportedly working on its own productivity suite of apps.

Microsoft to Buy AI From Anthropic in Partial Shift From OpenAI