OpenAI's Issues Aren't an Illusion
At least not if you look at how its customers are planning to spend their money... and with whom.
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▶If you want to harken back to when you KNEW OpenAI had problems, the actual tell, it was that podcast back in October…
That’s when co-host Brad Gerstner asked Sam Altman…
How can a company with $13 billion in revenues make $1.4 trillion of spend commitments? You’ve heard the criticism, Sam.
Altman tensed up and shot back tersely and tensely…
If you want to sell your shares, I’ll find you a buyer. Enough.
You almost had to see it and hear it to fully appreciate the tension of the moment.
Head’s up: I’m fast-tracking a new Red Flag Alert of one non-tech company – ironically, already in process – that has put all its chips on data centers, with zero room for error. Stay tuned!
As time has gone on, it has become increasingly apparent why he was more intense than usual, with this story in the Wall Street Journal saying the quiet part out loud…
More specifically….
OpenAI recently missed its own targets for new users and revenue, stumbles that have raised concern among some company leaders about whether it will be able to support its massive spending on data centers.
Chief Financial Officer Sarah Friar has told other company leaders that she is worried the company might not be able to pay for future computing contracts if revenue doesn’t grow fast enough, according to people familiar with the matter.
Not surprisingly, OpenAI this morning told CNBC the report “is ridiculous,” adding…
We are totally aligned on buying as much compute as we can and working hard on it together every day.
But the real story isn’t what the Journal wrote or what OpenAI is saying, but what OpenAI’s customers are not just saying, but doing.
And based on the surveys from my friends at the market research firm ETR, which specializes in surveying corporate IT spenders, OpenAI is rapidly losing the momentum that comes with first-mover advantage.
Most telling, in going through the actual survey results, is the number of users that have decreased spend who say they are shifting to Anthropic.
You can see the trend clearly in this slide…
And this one….
But this one is most telling, because it shows just how much Anthropic is overtaking OpenAI not just in mind share, but spending…