OpenAI revenue concerns trigger a slide in tech stocks

Tech companies saw their stocks plummet on Tuesday after a Wall Street Journal report claimed that ChatGPT maker OpenAI is missing its revenue and user targets.

Insiders told the WSJ that the company did not meet its goal of reaching 1 billion weekly active users by the end of 2025. It also fell short of its yearly and monthly revenue targets amid growth from competitors Google, Gemini, and Anthropic.

OpenAI Chief Financial Officer Sarah Friar is concerned about the company’s revenue growth and questions whether it can finance its future computing contracts. 

The Sam Altman-led AI startup is reportedly planning to file for an IPO. The move would require it to publish its earnings reports.

The report was enough to raise fears of an AI spending bubble. Stocks of semiconductor firms fell. Broadcom sank 4.4%, Micron Technology fell 3.9%, and Nvidia declined 1.6%.

Notably, chipmaker Nvidia originally announced a $100 billion agreement with OpenAI last September, which has been downsized to $30 billion, according to the Financial Times.

The S&P 500 fell 0.5%, the Nasdaq composite dropped 0.9%, and the Dow Jones Industrial Average slipped 0.1%.

OpenAI’s leadership dismissed the reports as “clickbait,” maintaining that the company remains on a steep growth trajectory.

Investors are now awaiting this Wednesday’s Big Tech earnings reports from Alphabet, Amazon, Meta, and Microsoft for clarity on AI returns.