European and global tech investors were rattled on Thursday after a report questioned how much revenue OpenAI, the company behind ChatGPT, is actually generating. The news sent the Nasdaq Composite down 1.25% and hit chipmakers and cloud giants, but US futures rebounded on Friday morning, suggesting the sell-off may be short-lived.
The confusion began when the Financial Times reported that OpenAI's annualized revenue—a projection of recent sales over a full year—was "approaching $50 billion" at the end of September, according to figures shared with investors. That is roughly $20 billion (€17.8bn) less than the $70 billion figure that had been circulating, which was based on a different method of counting revenue.
So where did the $20 billion go? In short, nowhere. The gap does not mean OpenAI missed a target or lost sales. The higher figure was an estimate, not a company forecast, and it came from OpenAI's backers recalculating its sales to match the accounting method used by rival Anthropic. Anthropic counts what customers spend on its AI models through cloud platforms such as Amazon Web Services and Google Cloud as revenue, while OpenAI excludes such sales from its own figures.
At face value, OpenAI's reported revenue trails the $65 billion that Anthropic reportedly hit at the end of July, although the different accounting methods make a direct comparison difficult. OpenAI has not publicly responded to the reports.
The stakes are high. OpenAI, valued at $852 billion in March, is reportedly seeking at least $30 billion in fresh funding at a $1.4 trillion valuation. The company's growth is closely watched by investors across the tech sector, and any sign of weakness can trigger broad sell-offs.
Market fallout and European connections
Shares in companies that have bet heavily on OpenAI's growth were among the hardest hit. Oracle, which has agreed to supply OpenAI with vast computing power, slid 5.5%, while CoreWeave, an AI cloud specialist with multibillion-dollar contracts with the firm, lost nearly 8%. Microsoft, a major OpenAI shareholder, Amazon, Alphabet and Meta all fell by more than 1%.
Chipmakers also took a hit: Nvidia was down almost 3%, AMD fell around 4%, and Broadcom, which is building a custom chip with OpenAI, dropped 4.35%. In Tokyo, shares in SoftBank Group, which owns about 13% of OpenAI, fell as much as 7.3% before paring losses.
For European investors, the ripple effects are significant. Many European pension funds and asset managers hold US tech stocks, and the continent's own tech sector is closely tied to the global AI supply chain. Dutch chip equipment maker ASML, for instance, is a key supplier to TSMC and Samsung, and its results are seen as a bellwether for the industry.
Despite the negative news, other signals this week suggest demand for AI hardware remains robust. South Korea's Samsung estimated on Thursday that its third-quarter operating profit hit a record 107.4 trillion won, or $80.2 billion (€71.5bn). If confirmed, that would be the biggest quarterly operating profit ever reported by a technology company, surpassing Nvidia's $63.7 billion operating income in its latest quarter.
Taiwan's TSMC, the world's largest contract chipmaker, said the same day that September sales rose 54.6% year-on-year, taking third-quarter revenue to a record NT$1.49 trillion, or $46.8 billion (€41.8bn). These figures suggest that the underlying demand for AI chips and infrastructure is still growing strongly.
Investors will get a clearer read next week when ASML reports on 14 October and TSMC on 15 October. Their results will be closely watched for any signs that the AI boom is slowing, or whether the recent market jitters are just a temporary reaction to accounting discrepancies.
The episode also highlights broader concerns about transparency in the AI sector. As companies like OpenAI raise massive sums and valuations soar, investors are increasingly scrutinizing their revenue figures. The difference in accounting methods between OpenAI and Anthropic underscores the need for standardized reporting in the industry.
For now, the AI trade appears to be intact, but the volatility serves as a reminder that the sector's growth is not without risks. As European and global investors digest the news, the focus will shift to the upcoming earnings reports from key players in the supply chain.
