According to a report in The Information, OpenAI is vying to maintain its pole position in the artificial intelligence space this year, increasing its profit margins from paid products.
The publication reported that the company improved its “computing margins.” This is an internal number that measures the percentage of revenue before the costs of running a paid user model for enterprise and consumer products. Citing people familiar with the numbers, the magazine said that as of October, OpenAI's computing margin had reached 70%, up from 52% at the end of 2024 and twice as much as in January 2024.
An OpenAI spokesperson said the company does not release numbers and declined further comment.
Read more: OpenAI executives struggle to combat AI spending concerns
The creators of ChatGPT sparked the modern AI boom, but they have yet to show profits, one of the key indicators for investors concerned about bubbles in the industry. OpenAI, which was valued at $500 billion in October, has been looking for ways to generate revenue to cover high computing costs and ambitious infrastructure plans.
At the same time, the company faces intense pressure from spending and new competition. After Alphabet Inc.'s Google Gemini model performed better in benchmarks, OpenAI CEO Sam Altman called a “Code Red,” directing internal resources to improve ChatGPT and slowing progress on plans for the advertising service.
Most people use the free version of ChatGPT. But the company is pushing business versions and paid software features for industries like financial services and education, where it competes with Google and rival Anthropic.
The Information reported that while OpenAI has better compute margins than Anthropic for paid accounts, Anthropic has better overall server spend efficiency.
OpenAI has also raised at least $10 billion from Amazon.com and is in early talks to use its chips, potentially valuing Altman's company at more than $500 billion.
