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Talk about out of touch with reality. Investors slammed the tech sector on Tuesday, spurred in part by a Wall Street Journal report that OpenAI had missed some internal revenue projections. Among the biggest to take a hit were two cloud firms that depend heavily on OpenAI for business: Oracle and CoreWeave, whose stocks fell 4% and 5.8%, respectively. It seems investors were surprised by the idea that all might not be well at OpenAI. Have they not been paying attention?
After all, signs of dysfunction at the ChatGPT firm have been growing for a while. For one thing, as The Information has reported several times, OpenAI didn’t reach its 1 billion weekly active user goal for the end of 2025 (we recently reported the user number had reached 920 million). The shortfall in user growth makes a corresponding shortfall in revenue entirely predictable.
Then there are the company’s chaotic strategic shifts, with new business initiatives such as shopping scaled back with little warning and other efforts such as the Sora video-generation app shuttered. We also reported on tensions between CEO Sam Altman and Chief Financial Officer Sarah Friar over whether to go public this year. What about the fact that Anthropic’s annualized revenue run rate has apparently passed OpenAI’s? That seems to confirm how much the competitive landscape has shifted.
Indeed, while Anthropic focuses on selling to the business market, OpenAI seems to be increasingly focused on the consumer market. We reported this afternoon that OpenAI expects many of its paying subscribers (who account for a tiny majority of its users) to downgrade this year to a cheaper plan, introduced in January, that carries ads. It’s no secret OpenAI is trying to ramp up its ad business. Given that it is competing for ad dollars with Meta Platforms and Google, it’s really uncertain whether that ad push will succeed. And yet now, success in ads is vital for OpenAI’s future!
Bullish sentiment about AI has returned to Wall Street in recent weeks. But one company that deserves more scrutiny is OpenAI.
Social Media Muzzle for OpenAI-Musk Trial
The first big challenge for Elon Musk in the trial phase of his lawsuit against OpenAI came before opening arguments: Major participants had to agree to stop tweeting about the case. (For more on today’s proceedings, see here).
The pledge to stay off social media for the duration of the trial also affects OpenAI CEO Sam Altman and President Greg Brockman. The parties agreed to it Tuesday morning, at the start of a session that will include opening arguments and potentially testimony from Musk.
Judge Yvonne Gonzalez Rogers called Musk up to the bench before the jury entered the courtroom to discuss his social media posts about OpenAI. “How can we get this done without you making things worse outside the courtroom?” she asked Musk, who said his posts were responding to OpenAI’s statements on social media.
“All of you try to to control your propensity to use social media,” she said. “Perhaps you’ve never done that before.”
A social media moratorium about the case could be most challenging for Musk, whose longtime love of tweeting is so intense that he bought the platform. He generally posts on X numerous times a day and has frequently used it to criticize OpenAI and ridicule its leaders. As of Tuesday morning, the post pinned at the top of his X page began: “Scam Altman and Greg Stockman stole a charity. Full stop.”—Rocket Drew
In Other News
• Robinhood shares fell more than 6% in after-market trading after reporting a 47% plunge in crypto trading revenue from a year ago. Despite the slump, record volumes in prediction markets lifted the company’s total revenue 15% to $1.07 billion.
• OpenAI models will finally be available on Amazon Web Services, the companies said Tuesday, a day after OpenAI and Microsoft announced new terms in their long-standing partnership that free other cloud providers to sell OpenAI’s models with fewer restrictions.
• Spotify stock dropped 13% after the music-streaming service reported 8% revenue growth for the first quarter but forecast a slowdown in its premium subscriber growth rate for the second quarter.
• Meta Platforms is preparing for a possible unwinding of its $2 billion acquisition of AI agent application Manus, after Chinese regulators ordered that the parties involved in the deal revoke the transaction, The Wall Street Journal reported.
Today on The Information’s TITV
Check out today’s episode of TITV in which we recap some of the big insights that came out of our finance conference this week at the New York Stock Exchange.
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