OpenAI's Insane Scaling Problem
$20 billion?
A few days ago, OpenAI announced that its Annualised Recurring Revenue (ARR) for 2025 was $20 billion. That is more than double their 2024 annual revenue! So, has Altman finally succeeded? Is OpenAI close to becoming a financially stable company? Well, no. For one, this $20 billion figure seems awfully optimistic when you look at the details. But even if they did actually achieve this figure, it likely isn’t enough. Why? Because AI has a serious scaling problem. Let me explain.
Things Aren’t Adding Up.
In the first half of 2025, OpenAI reportedly generated $4.3 billion in revenue, which was expected to reach $12 billion by the end of the year. So, with an annual revenue of $20 billion, they generated twice as much money in the second half of 2025 as they had anticipated. What drove this dramatic increase? Weekly users and paid users haven’t increased substantially more in the second half of 2025 than in the first, and there have been no new major corporate partnerships to drive this level of revenue either. What is going on?
Well, as found by Ed Zitron, a telltale sign that things are not what they seem is that OpenAI paid Microsoft $454.7 million in revenue sharing during the first half of 2025. As part of their partnership, OpenAI is expected to pay Microsoft 20% of its revenue. So that means OpenAI had actually made $2.27 billion in revenue during the first half of 2025, which is $2 billion less than reported. In Q3, OpenAI paid Microsoft another $411.1 million, meaning they made $2 billion in revenue in Q3. All the figures suggest that Q4 could have experienced a similar growth, so we can assume a $4 billion revenue for Q4. But all of this equates to an annual revenue of around $9 billion, which is less than half the claimed $20 billion.
Another sign that things aren’t quite what they seem is OpenAI’s reported users. OpenAI has reported that ChatGPT had 800 million weekly users by the end of 2025. Multiple third-party sources have found that only 5% of users pay for ChatGPT, so we know that roughly 40 million people do. If they all pay the $20 per month subscription, that equates to $9.6 billion a year in revenue. But we also know that roughly 30% of OpenAI’s revenue comes from other sources, like licensing. So we can infer that the current annualised revenue should be around $13.7 billion. However, ChatGPT started 2025 with far fewer weekly users, which means that its total revenue for 2025 should be substantially below $13.7 billion.
This is why I personally find that $20 billion figure hard to believe. It looks like $10 billion or more has magically dropped into OpenAI’s wallet at some point in the last quarter of 2025. Where did that come from?
