ChatGPT maker OpenAI has achieved a significant milestone, hitting $1.6 billion in annual revenue despite the leadership upset in November caused by the abrupt ouster of company CEO Sam Altman, reports The Information.
Impressively, this revenue figure is higher than in mid-October even though OpenAI rivals attempted to take advantage of its management crisis. Better yet, OpenAI members believe that the annual revenue could reach a remarkable $5 billion by the end of 2024, which is an increase of more than 310%.
The remarkable 20% surge within a mere two-month period, as shown in the annualized revenue calculation (last month’s revenue times twelve), demonstrates the firm’s robust ability to maintain its growth. The startup was able to maintain its momentum and continued to sell its artificial intelligence technology to enterprises as well as individual customers.
OpenAI’s revenue is derived from two main sources: selling subscriptions to its ChatGPT chatbot and levying charges on software developers for the use of its models via an application programming interface, better known as API.
In December, Bloomberg revealed that OpenAI is in the process of securing additional funds at a valuation of $100 billion. This valuation suggests a revenue multiple of approximately 62 times its projected earnings. While this figure is high compared to typical publicly-listed enterprise software firms, it aligns with the valuations of rapidly expanding competitors in the field. For example, Anthropic, a model development company, projected an annual revenue of $200 million earlier this year. Based on this, investors in its current funding round are valuing the company at about 75 times its anticipated revenue.
As for OpenAI’s management in November, the board of directors had directly announced the removal of CEO Sam Altman due to a “lack of consistently candid communication.” However, after a severe backlash from the company’s over 900 employees, as well as OpenAI’s biggest investor Microsoft, Sam Altman was reinstated to his original position alongside co-founder Greg Brockman, who was also removed from the board.
Microsoft CEO Satya Nadella had even announced the hiring of Sam Altman, Greg Brockman, and other OpenAI employees leaving the company, but this turned out to be just a step to recover Altman’s original position.