OpenAI fell short of internal revenue targets for the first quarter of 2026, according to the Wall Street Journal. The company also missed user growth goals for ChatGPT, including a target of one billion weekly active users by the end of 2025, as reported by The Information.
The challenges are largely attributed to the rapid growth of Google's Gemini chatbot and Anthropic's surging revenue. Despite being founded five years after OpenAI, Anthropic has nearly closed the revenue gap, particularly in coding and enterprise markets, according to the WSJ. Rising churn rates among ChatGPT subscribers are also concerning.
Slowing Growth Meets Massive Spending
The missed targets come as CEO Sam Altman committed OpenAI to roughly $600 billion in future data center spending through deals struck last year. The company expects to burn through $25 billion in cash in 2026 against a revenue target of $30 billion, following $13 billion in revenue and $8 billion in losses the previous year.
CFO Sarah Friar has raised concerns internally about whether OpenAI can meet its future computing contracts if revenue growth falters, according to the WSJ. The board has also questioned Altman's strategy of locking in compute capacity. Altman and Friar dismissed reports of disagreements in a joint statement.
On the IPO front, Altman wants to accelerate going public, while Friar believes the company won't be ready for the reporting requirements in 2026, per The Information.
OpenAI recently raised $122 billion, the largest funding round in Silicon Valley history. According to the WSJ, that cash could be spent within three years if the company hits its ambitious revenue targets, and parts of the funding are tied to specific conditions. On a positive note, the coding tool Codex is gaining traction, and the recently released GPT-5.5 leads several industry benchmarks, though it still hallucinates frequently at a 20% higher API cost.
Adding to the pressure, an ongoing lawsuit from Elon Musk against Altman and the unexpected medical leave of Altman's deputy Fidji Simo are weighing on the company as it approaches a potential IPO.