Elon Musk took the stand in a California courtroom today to ask for OpenAI CEO Sam Altman’s ousting. Still, it wasn’t the worst thing that happened to the executive on Tuesday.
That’s because on Monday night, the Wall Street Journal published a report claiming that ChatGPT’s growth had slowed toward the end of last year, and as a result, OpenAI had missed its internal goal of one billion weekly active users and its own target revenue for the year.
Citing people familiar with the matter, the WSJ reported that CFO Sarah Friar was worried about revenue growth and unsure if OpenAI could pay for its many computing contracts.
These concerns have put Friar and a bunch of other executives at odds with Altman, the report claims, as they have sought to rein in costs. Meanwhile, the OpenAI board has questioned Altman on his “efforts to secure even more computing power despite the business slowdown,” the WSJ wrote.
If the report is true, it clashes with the picture that OpenAI has been trying to portray. OpenAI and many of its peers in the AI industry have long claimed that AI demand would arrive, and to accommodate it, the industry has to rapidly shore up as much computing capacity as possible. This has led to a record investment in AI data centers, a risky bet that some experts have claimed could be overkill, and an industry-wide dealmaking frenzy that has placed OpenAI at the center of it.
OpenAI has inked so many multibillion-dollar deals that it sparked worries of circular dealmaking and a potential AI bubble where only one failure (such as if OpenAI were to fail to deliver on its massive financial commitments) could create a domino effect that could take the entire industry, and perhaps even the American economy, down with it.
As a result, the market had a proper freakout on Tuesday, sending the shares of any company with substantial ties to OpenAI down, which, in this current climate, is much of the tech industry. So much so that at least one company had to come out and renounce its reliance on OpenAI.
The shares of cloud computing companies Oracle and Coreweave both sustained a particularly big hit because both have signed lucrative computing contracts worth billions of dollars with OpenAI. A Coreweave spokesperson tried to appease investor worries, telling Bloomberg that “OpenAI is a terrific partner, but not our only one.”
OpenAI has also denied the claims in the Wall Street Journal report and said in a post on X that the company has “breakout Codex growth, enterprise offerings on every cloud, the only consumer app that matters, a computer strategy built to accelerate, and the best researchers in the world.”
But rumors of the AI giant’s struggles have been circling for some time now. They mostly began late last year, when Google’s Gemini release was deemed by many on the internet to be superior to ChatGPT. Shortly after Gemini’s success, OpenAI executives declared a “code red” crisis at the company. Then came Anthropic’s agentic AI releases Claude Code and Claude Cowork, both of which have dominated the coding and enterprise markets in the last few months. According to the WSJ, the 2025 revenue target miss was due partially to Gemini eating into ChatGPT’s market share. The report also claims that OpenAI has continued to miss multiple monthly revenue targets in 2026 due to Anthropic’s success.
Meanwhile, OpenAI also raised many eyebrows when its $100 billion deal with Nvidia, which was the first multibillion-dollar OpenAI investment that really fueled fears of circular dealmaking last year, fell apart.
As it reportedly prepares for an IPO later this year, the company has taken some steps to reduce costs, like shutting down its AI video-generator Sora, and to increase revenue, with controversial initiatives like ads in ChatGPT.
Earlier this month, a New Yorker investigation cited numerous insiders who accused Altman of lying to OpenAI’s board and of being untrustworthy in business dealings. Around the same time, a report from The Information said that Altman and Friar were at odds over OpenAI’s readiness for an IPO. Similar to the claims made in the WSJ piece, The Information report also said that Friar was uncertain that OpenAI’s revenue growth could support its $600 billion spending commitment over the next five years, because the company is expected to burn more than $200 billion before it starts making money.
These concerns over spending are also not unique to OpenAI. AI giants were scrutinized for their heavy financial commitments in the last round of tech earnings, especially after analysts warned that it could turn the companies’ cash flow negative. Microsoft specifically was also under investor scrutiny for its heavy reliance on OpenAI, namely that almost half of its cloud commitments were solely from the AI giants.
The fear was prominent enough that Nvidia CEO Jensen Huang had to spend his company’s earnings call doing damage control for AI hyperscalers and repeatedly assuring investors that revenue would follow their investments. Now, the latest OpenAI news only adds more fuel to that fire, as Microsoft, Meta, Amazon, and Google are all set to report quarterly earnings tomorrow afternoon.
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