OpenAI expects to 3X revenue in 2025 but Chinese AI firms are heating up

OpenAI expects to more than triple its revenue this year to $12.7 billion, despite fast-growing competition from the likes of China’s DeepSeek and other competitors making rapid progress.

The ChatGPT creators also expect its revenue target for 2025 to more than double to $29.4 billion by 2026, Bloomberg reported on March 26, citing a person familiar with the matter.

The 2025 estimate is a little higher than the $11.6 billion revenue target that OpenAI was reportedly eyeing for 2025, The New York Times reported last September.

Bloomberg noted that the bulk of ChatGPT’s revenue has come from its paid AI software subscription offerings for consumers and businesses.

OpenAI reportedly hit 1 million paid users for the corporate versions of ChatGPT last September, while the company more recently added a $200 monthly ChatGPT Pro option.

The Sam Altman-led firm does not expect to be cash-flow positive until 2029, when it expects its revenue to top $125 billion, the person told Bloomberg.

OpenAI is reportedly close to finalizing a $40 billion funding round led by SoftBank Group at a valuation of up to $300 billion, Bloomberg reported on March 26. The firm is also looking to convert its nonprofit business model into a for-profit venture.

Competition heats up between US and Chinese AI players

While the release of DeepSeek’s ChatGPT-competitor “R-1” model sent shockwaves through the AI industry in late January, it sparked a wave of several other high-quality, low-cost AI solutions from other Chinese tech firms, Bloomberg reported on March 26.

Baidu Inc. launched its “Ernie X1” model to compete with DeepSeek’s R-1 model in China, while Alibaba Group launched its new open-source AI model for cost-effective AI agents on March 26.

Tencent Holdings also unveiled an AI chatbot of its own under subsidiary firm Ant Group Co, while DeepSeek released its latest model — DeepSeek-V3-0324 — on March 24.

While it remains to be seen how these Chinese models truly stack up against OpenAI’s products, the newer and often cheaper options are putting more pressure on the business models of leading US companies, Balaji Srinivasan, a tech investor and former general partner at tech-focused venture capital firm Andreessen “a16z” Horowitz said in a March 22 X post.

“China is trying to do to AI what they always do: study, copy, optimize, and then bankrupt everyone with low prices and enormous scale.”

Lee Kai-fu, CEO of Chinese startup 01.AI told Reuters on March 25 that DeepSeek’s efforts have positioned Chinese AI firms only three months behind their US counterparts after previously being around six to nine months behind.

Meanwhile, OpenAI’s CEO Sam Altman said on Feb. 12 that his firm is looking to ship GPT-4.5 and GPT-5 in the coming weeks or months.

Plus and Pro subscribers will be able to run GPT-5 at a “higher level of intelligence” which will incorporate voice, canvas, search, deep research features and more, he said in OpenAI’s technical roadmap update.

Among OpenAI’s competitors in the US market are Anthropic, DeepMind, xAI and Google’s Gemini.

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