OpenAI’s annualized revenue has reportedly topped $1.6 billion a mere two months after reaching the $1.3 billion mark. 

The Information reported the milestone on Saturday, citing two people familiar with the matter. OpenAI’s sales momentum comes amid reports that it’s seeking to raise new funding. The company reportedly hopes to close the round at a valuation of at least $100 billion.

OpenAI’s rapid sales growth began after it launched the paid version of its ChatGPT service, ChatGPT Plus, in February 2023. Earlier, the company mainly generated revenue by providing its artificial intelligence models to developers via an application programming interface. The company reportedly lost $540 million in 2022 on revenue of just $28 million.

According to Reuters, OpenAI originally expected to close 2023 with sales of $200 million. ChatGPT Plus has proven more popular than the company had expected: OpenAI’s run-rate reportedly topped $1 billion in August and reached $1.3 billion two months later. The new report from The Information that OpenAI’s annualized revenue has passed $1.6 billion suggests that its run-rate grew more than 20% in the past two months.

The company’s sales momentum is expected to continue into 2024. According to the new report, some OpenAI executives believe that its annualized recurring revenue will nearly quadruple, to $5 billion, by year’s end. 

That optimistic outlook raises the possibility the company is not counting on demand for existing products alone to sustain its sales growth. In particular, it may be planning to launch new AI services and thereby create additional revenue streams.

In November, OpenAI Chief Executive Officer Sam Altman divulged that the company is working on a new flagship large language model called GPT-5. He stated that it will be more advanced than GPT-4. However, Altman didn’t specify when GPT-5 will launch or what new features it can be expected to provide.

OpenAI’s rapid revenue growth could help it secure a higher valuation from investors in the coming year. 

In April, TechCrunch reported that the AI developer had completed a secondary share sale at a valuation of $27 billion to $29 billion. Last month, sources told Bloomberg that OpenAI is close to completing another secondary sale at a $86 billion valuation. The sources added that the company could soon be worth more than $100 billion thanks to a new funding round it’s currently negotiating with investors.

The surging AI demand that has boosted OpenAI’s top line and revenue is also said to be benefiting its competitors. Large language model developer Anthropic PBC reportedly expects to achieve an annualized revenue run rate of $850 million this year, significantly more than the approximately $500 million it had projected in August. The company is also said to be in talks to raise $750 million at a $15 billion valuation. 

Image: OpenAI