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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…
