OpenAI’s Revenue Skyrockets to $12.7B—Can Rivals Keep Up?

OpenAI is on track to more than triple its revenue in 2025, reaching an estimated $12.7 billion. The company continues to see strong growth from its paid AI software offerings, but competition from Chinese tech firms is rapidly increasing.

OpenAI expects its revenue to reach $12.7 billion this year, a sharp increase from previous projections. The company also anticipates its revenue to more than double in 2026, potentially reaching $29.4 billion, according to a Bloomberg report citing an anonymous source.

Much of OpenAI’s revenue comes from its paid AI subscription services, which cater to both individuals and businesses. The company reported hitting 1 million paid corporate users last year and recently introduced a $200 monthly “ChatGPT Pro” subscription.

Despite its strong revenue growth, OpenAI does not expect to be cash-flow positive until 2029. At that point, the company projects its revenue will exceed $125 billion. OpenAI is also reportedly in discussions to secure a $40 billion funding round led by SoftBank Group, which could push its valuation up to $300 billion.

Chinese AI Firms Gain Ground With Cost-Effective Models

China’s AI market is expanding rapidly, with several companies releasing new models that compete directly with OpenAI’s ChatGPT. DeepSeek, a leading AI firm in China, gained attention with the launch of its “R-1” model in January. Since then, multiple Chinese firms have entered the AI space with competitive and lower-cost alternatives.

Baidu Inc. recently introduced its “Ernie X1” model, aiming to challenge DeepSeek’s advancements. Alibaba Group followed with a new open-source AI model designed to offer cost-effective AI solutions. Tencent Holdings has also entered the competition through its subsidiary, Ant Group, with the launch of its own AI chatbot.

Everything was leading up to agents. Biggest wave ever. https://t.co/i0rYiGip2b

— David Sacks (@DavidSacks) March 27, 2025

DeepSeek remains at the forefront of China’s AI development, having released its latest model, DeepSeek-V3-0324, on March 24. Chinese AI firms are now closing the gap with U.S. companies, with 01.AI CEO Lee Kai-fu stating that China is only three months behind its American competitors.

Chinese AI is trading at a 50% discount to US peers.

Now that is not even filtering out companies that have cash on the books, are super profitable and alike.

The money flows have just started to shift towards foreign markets, I believe this will continue. pic.twitter.com/KYBQlh9x0l

— THE SHORT BEAR (@TheShortBear) March 26, 2025

Experts Warn of Pricing Pressure on U.S. AI Firms

Industry analysts believe the rapid growth of Chinese AI companies could put pressure on OpenAI and other U.S.-based firms. Tech investor Balaji Srinivasan shared his perspective on X (formerly Twitter), stating that China is applying its well-known approach to AI by analyzing existing models, refining them, and then undercutting competitors with large-scale production and lower prices.

The rapid growth of Chinese AI models could force OpenAI and its U.S. competitors to adjust their pricing and business strategies. With lower-cost options emerging, businesses and individual users may start exploring alternatives.

OpenAI Prepares for the Next Wave of AI Development

As competition increases, OpenAI is pushing forward with new AI advancements. CEO Sam Altman stated on February 12 that the company is preparing to launch GPT-4.5 and GPT-5 in the coming months. These models will introduce new features such as voice capabilities, expanded search functions, and deep research tools.

Plus and Pro subscribers will gain access to GPT-5, which is expected to deliver a higher level of intelligence. The upcoming models will play a crucial role in OpenAI’s strategy to maintain its market position amid growing global competition.

While OpenAI remains the leading AI firm, the rise of Chinese competitors introduces new challenges. With AI technology evolving quickly, the competition between U.S. and Chinese firms is set to intensify in the coming years.