A Peek Behind OpenAI’s Financials; Don’t Underestimate China

We repeatedly heard two questions following our report on OpenAI’s staggering revenue growth earlier this month: What percentage of revenue comes from ChatGPT subscriptions versus OpenAI’s application programming interface, through which app developers can access its models? And what are OpenAI’s computing costs?

This morning’s in-depth piece from Aaron brings us closer to answering both.

Subscriptions to ChatGPT are the majority of OpenAI’s revenue by quite a margin—but its API business seems to be catching on fast. As of March, OpenAI’s annualized revenue from its API had reached $1 billion, triple from where it was in mid-2023, a significant chunk of OpenAI’s $3.4 billion overall annualized revenue.

That growth was fast enough, in fact, that the business appears to have surpassed Microsoft’s competing API, Azure OpenAI Service, which only recently hit $1 billion in annualized revenue. Despite all the distribution advantages Microsoft enjoys, OpenAI is showing that it can hold its own with potential customers by promising ease-of-use and early access to new models.