OpenAI missed internal user, revenue targets in high-stakes path to IPO: Report

OpenAI has fallen short of its own targets for user growth and revenue, raising concerns among some executives about its ability to sustain heavy spending on data centres, the Wall Street Journal reported, citing people familiar with the matter.

The OpenAI chief financial officer Sarah Friar has warned internally that the company may struggle to meet future computing contract obligations if revenue growth does not accelerate, according to the report.

Board members have also stepped up scrutiny of data-centre commitments and questioned chief executive Sam Altman over efforts to secure additional computing capacity despite a slowdown in business, the report said.

Altman and Friar, however, pushed back in a joint statement, saying they are aligned on securing computing resources.

“Any suggestion that the pair are divided or pulling back on securing new computing resources is ridiculous,” the report quoted them as saying.

OpenAI had previously embarked on an aggressive push to lock in data-centre capacity, committing to hundreds of billions of dollars in future spending.

The strategy, backed earlier by the board and buoyed by the rapid rise of ChatGPT, has come under renewed scrutiny after growth slowed toward the end of last year, the report said.

The company missed an internal goal of reaching one billion weekly active users for ChatGPT and also fell short of its annual revenue target, partly due to rising competition from Google’s Gemini AI models, according to the report.

It also faced subscriber churn and missed multiple monthly revenue targets earlier this year amid competition from Anthropic in coding and enterprise markets.

OpenAI recently raised about $122 billion in fresh funding, but expects to spend much of it over the next three years on computing infrastructure, assuming it meets ambitious growth targets. Some of the funding is conditional on partner agreements.

OpenAI also told investors it has secured more computing capacity than Anthropic.

Friar, meanwhile, has expressed reservations about a potential initial public offering by year-end, citing the need to strengthen internal controls to meet public market requirements. Altman, on the other hand, has favoured a faster timeline.