AI stocks plunge after report reveals OpenAI missed internal growth targets
&imwidth=600&imheight=450&format=webp&quality=medium "AI stocks plunge after report reveals OpenAI missed internal growth targets")
AI stocks plunge after report reveals OpenAI missed internal growth targets Photograph: (Credit: AFP)
Is ChatGPT losing steam? With Anthropic’s Claude 3.5 gaining ground, OpenAI’s recent missed targets have rattled the tech sector.
A wave of selling hit the artificial intelligence sector on Tuesday after a leaked report indicated that OpenAI has missed critical internal growth targets, sparking fears that the high-velocity "AI trade" may be cooling. The report published in news outlet Wall Street Journal revealed that the Sam Altman-led firm fell short of its goal to reach one billion weekly active users for ChatGPT by the end of 2025. The company also reportedly missed several monthly revenue benchmarks as competition from Anthropic’s Claude 3.5 and Google’s Gemini began to erode OpenAI’s once-dominant market share.
The news sent shockwaves through the "AI complex," particularly affecting companies that have built massive infrastructure specifically to serve OpenAI’s demands. As per news agency AFP Oracle dropped four percent to $166 on Wall Street. The tech giant has signed one of the biggest cloud deals with OpenAI, amounting to $300 billion in computing power over five years. CoreWeave's shares slid 3.7 percent to $107.70. The Nvidia-backed AI startup signed an $11.9 billion contract with OpenAI last month to provide AI infrastructure. Chipmakers including Nvidia, Broadcom and Advanced Micro Devices also declined.
As reported by WSJ, OpenAI’s Chief Financial Officer Sarah Friar has privately expressed caution regarding the company’s plans to go public by the end of the year. Friar reportedly warned that the firm might struggle to meet the rigorous reporting standards required of a public company given the current revenue trajectory.
Despite the internal friction, OpenAI and its CEO Sam Altman maintain an aggressive stance. In a joint statement to news Reuters, the leadership team emphasised they remain "totally aligned" on acquiring as much compute power as possible, even as the firm projects a staggering $25 billion cash burn this fiscal year.
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