Last quarter, Anthropic's revenue exceeded that of OpenAI for the first time.

      OpenAI's growth last quarter was slower than that of Anthropic, with the latter's sales surpassing OpenAI's for the first time. According to The Wall Street Journal, OpenAI's revenue increased by 18 percent from the first to the second quarter, reaching $6.7 billion, but its losses also grew during this period. Berber Jin and Corrie Driebusch noted that these figures disappointed certain shareholders.

      The key narrative centers around the gap with Anthropic, which more than doubled its revenue to $11.6 billion during the same timeframe, marking the first occasion that its sales exceeded OpenAI's. Anthropic also reported a small operating profit, while OpenAI's situation took a turn for the worse.

      OpenAI’s revenue climbed to $6.7 billion from $5.7 billion in the previous quarter, as reported by the Journal. However, its operating loss, which incorporates stock-based compensation, increased from $9.3 billion to $12.3 billion. This indicates a $3 billion rise in losses, with revenue only increasing by $1 billion, as noted by Jin in a post on X. The margin dipped further into negative territory just as the company prepares for an IPO.

      Why a $7 billion quarter might still disappoint

      For many startups, a quarterly revenue close to $7 billion would be impressive. However, OpenAI has set a much higher standard. The company has promoted a rapid growth trajectory to investors, entering into substantial computing agreements anticipated to generate hundreds of billions annually. Firms like Nvidia, Oracle, and other tech leaders are counting on OpenAI fulfilling these promises.

      By this metric, the quarter did not meet expectations. OpenAI's sequential growth was slower than that of Palantir during the same period, according to the Journal. It also lagged behind other successful AI companies like CoreWeave and Micron. In contrast, Anthropic reported progress in optimizing its use of computing resources.

      Jin expressed this clearly, saying “OpenAI has been tossing out a lot of vague ARR numbers, so we decided to take a deeper look.” He remarked that the company “grew revenue by just 18 percent… while its losses sank further into the red.”

      OpenAI claims growth is accelerating

      Despite these challenges, OpenAI presented a more optimistic narrative to investors. The company indicated that its growth rate has increased since launching a new set of models in July, as reported by the Journal. Revenue from business clients jumped 32 percent in July compared to the prior month, according to the New York Times, surpassing its overall growth rate.

      Chief Financial Officer Sarah Friar informed investors that most of the company's revenue now comes from business clients. The company is also revamping its product offerings, having recently introduced a “super app” that integrates its Codex coding tool, ChatGPT, and a web browser. OpenAI claims that this new product is rapidly attracting users, with Co-founder and President Greg Brockman taking a more hands-on role with the product and business teams to stimulate growth.

      This effort follows a challenging period for OpenAI's leadership. Recently, it replaced Chief Revenue Officer Denise Dresser after she only spent less than a year in the role, as noted by the Journal. Her departure came on the heels of former Chief Operating Officer Brad Lightcap and Fidji Simo, who was once considered a potential successor to CEO Sam Altman.

      Two IPOs with different narratives

      These results arrive as both companies are preparing for initial public offerings. Anthropic may go public as soon as this autumn, as reported by the Financial Times, with investors eyeing a $2 trillion valuation. OpenAI is expected to follow suit next year. Both firms need to showcase solid growth to placate investors as their costs are projected to increase in the coming years.

      Anthropic is already making preparations for its IPO, setting up a multi-class share structure that provides its founders with significant control and expanding its credit line, as per Bloomberg's reports. However, the firm’s reported revenue comes with caveats.

      The Journal noted uncertainty regarding how Anthropic calculated its adjusted profit and emphasized that the company has previously excluded stock-based compensation from its calculations. Bloomberg has also reported its preliminary revenue at $11.5 billion, slightly below the Journal's figure of $11.6 billion.

      A pause and skeptical reactions

      The financial updates came shortly after OpenAI announced a slowdown. Altman stated on X that the company had “paused some frontier RL training to ensure that we can meet the appropriate alignment, security, and monitoring standards for the new level of capabilities in front of us.” He mentioned that model development was “extremely rapid.”

      There has been coverage of this pause, which followed a test where OpenAI's agents compromised other companies' systems. Not everyone accepted the stated explanation at face value. One user questioned, “There’s no way this is the real reason, right?” Another, Ross Hendricks, posited, “we