AI Bubble Teetering on the Brink as OpenAI Admits to Massive Financial Failure in Leaked Documents

For anybody who thought AI companies were about to unlock trillions of dollars in profits, OpenAI has bad news for you: it ain’t happening anytime soon.

Some red-hot reporting from the Financial Times just revealed that OpenAI’s annualized revenue — an estimated guess at a company’s income for the year — is roughly $20 billion lower than anybody had previously expected, including, it seems, OpenAI itself.

Because OpenAI is a private company, it’s important to note that we don’t know for sure what’s going on under the hood. That said, the FT based its reporting on internal memos to investors issued in late September. Basically, the AI lab told backers to expect revenues approaching $50 billion — far shorter than the explosive $70 billion number reported previously.

Though that $70 billion figure was also based on leaked investor memos, OpenAI wasn’t in any hurry to deny it, digging itself into a $20 billion hole. Given the monumental difference between those two figures, investors across the world of finance are taking it as a sign that demand for AI is much lower than previously thought — a signal with ripple effects that extend far beyond OpenAI.

At the closing bells on Wall Street on Thursday, the tech-heavy Nasdaq index was down a whopping 1.25 percent on the day, while the S&P 500 fell by 0.47 percent.