OpenAI's $20 Billion Question: Should You Worry About Your AI Stocks?

It took one newspaper story and about 30 minutes.

On Thursday afternoon, the Financial Times reported that OpenAI, the company behind ChatGPT, recently told investors its annualized revenue was approaching $50 billion. That's about $20 billion less than the $70 billion figure that had been widely reported just a month earlier.

The Nasdaq-100 dropped more than 300 points in roughly half an hour. By the close, a key index of chip stocks was down 3.4%:

• Nvidia (NVDA): −2.9%, to $230.48
• AMD (AMD): −3.9%, to $620.68
• Broadcom (AVGO): −4.4%, to $360.14
• Micron (MU): −4.8%, to $1,035.84
• Arm (ARM): −6.5%, to $275.29

The companies that rent out AI computing power fell even harder: CoreWeave dropped 7.8%.

Why one number moved so much money

OpenAI is one of the biggest buyers of AI computing power in the world. It has signed deals to pay for enormous amounts of chips and data centers over the next several years.

So when investors hear OpenAI is earning less than they thought, the next question is: can it pay for everything it has ordered? And if it can't, who gets hurt? Chipmakers like Nvidia and AMD, and data-center landlords like CoreWeave.

Here's the twist

Most of that "missing" $20 billion was probably never there.

The gap comes down to how sales get counted. OpenAI's rival, Anthropic, counts the sales it makes through cloud partners like Amazon and Google at their full value. OpenAI counts only what it keeps. When outside investors tried to compare the two companies apples to apples, they inflated OpenAI's number. A person familiar with the documents told CNN the $70 billion figure never came from OpenAI.

Also worth knowing: "annualized revenue" isn't money in the bank. It's a company's current monthly sales pace, multiplied by 12.

So, should you worry?

Not about today. One report knocked chip stocks down a few percent, and even after the drop, Nvidia is still up about 24% this year and AMD about 190%.

But today was a useful reminder of how much the AI rally depends on a handful of companies spending enormous sums, and on investors believing that spending will pay off. When that belief wobbles, the most expensive stocks fall first.

What it means for you

• If you own an S&P 500 or Nasdaq index fund, you own all of these companies. A down day like this is normal, and it's no reason to sell.
• If you own AI stocks directly, make sure no single one is a big enough slice of your savings to keep you up at night.
• The riskiest names are the ones that borrowed heavily to build data centers, like CoreWeave. They fall hardest when doubts creep in.

What to watch

Taiwan Semiconductor (TSMC) reports earnings on Oct. 15. It makes chips for Nvidia, AMD and Apple, so its orders are the best real-world read on AI demand. If they're still growing, today will look like a blip.