Anthropic and OpenAI’s Share of AI Startup Revenues Rises to 89%
The Takeaway
- Anthropic and OpenAI now generate 89% of top AI startup revenue.
- Leading AI startups generate nearly $80 billion in annualized revenue.
- AI startups face significant cash burn despite rapid revenue growth.
Anthropic and OpenAI are widening the revenue gap between themselves and the rest of the AI startup field.
A group of 34 leading startups in that sector, including Anthropic and OpenAI, is generating nearly $80 billion in annualized revenue, or $6.6 billion per month, from selling AI applications or access to the models that power such apps, according to The Information’s Generative AI Database. That’s up 112% from six months ago.
Anthropic and OpenAI are currently capturing about 89% of that figure, our analysis shows. That’s 4.5 percentage points higher than the share of sales the two companies had in the same group six months earlier.
The result could strengthen an argument some investors at firms like Sequoia Capital have made that the vast majority of software value in the current AI era will be generated by the top developers of advanced AI models rather than by developers of pure AI apps. That’s because almost all the application companies in our analysis depend in part or almost entirely on models from Anthropic and OpenAI.
The smaller startups’ reliance on Anthropic and OpenAI could be a problem because those two leaders have been developing new kinds of models or versions of their products targeting specific industries or white-collar work roles, putting themselves in direct competition with their startup customers. That could eventually make it harder for those startups to keep up their growth.
That dynamic could help explain the frenetic funding environment for so-called AI neolabs that are seeking to leapfrog Anthropic and OpenAI by developing new kinds of AI models.
The $80 billion annualized sales figure is remarkable, as few of the companies existed or generated revenue before 2023. Anthropic can claim about half that amount, as its revenue recently surpassed OpenAI’s on the strength of its AI for coding tasks and other white-collar work.
The revenue figures for the two AI leaders are somewhat inflated, however, given that each of them shares a material amount with business partners. Anthropic shares a portion of its revenue with cloud computing providers, namely Amazon and Google, that resell its models to their customers. And OpenAI must share 20% of its revenue with Microsoft, an early backer, through 2030. This year, that revenue share to Microsoft could be $6 billion.
The 32 AI model or application startups not named Anthropic or OpenAI may not be growing as fast as the leaders. But they aren’t far behind in that regard and continue to hit new revenue milestones, largely through sales of subscriptions and some usage-based fees.
Since December, three of those companies crossed $500 million in annualized sales, joining coding app Cursor in that club, according to our analysis. The three newbies are search firm Perplexity, voice AI provider ElevenLabs and coding app Cognition. (Our analysis doesn’t include infrastructure startups that rent out Nvidia AI servers.)
Double Counting
As with our past analyses of AI startup revenues, there’s some double counting going on. The four aforementioned startups that are generating more than $500 million in annualized sales, as well as the other companies on the list, likely collectively pay OpenAI and Anthropic billions of dollars a year for models to power their products.
Almost all of the companies’ products are powered by Nvidia servers, helping the chip designer generate the vast majority of profits so far in the AI boom. Nvidia has partly returned the favor, investing capital in at least 13 of the 34 companies on our list, including about $40 billion in OpenAI and Anthropic combined. The capital helps the companies keep renting Nvidia servers.
Our analysis doesn’t cover public companies that are also generating revenue from AI applications and selling models they developed themselves. Microsoft, for instance, has generated at least $6 billion in actual revenue from selling Copilot-branded apps, powered in part by OpenAI models that it uses for free.
Google sells a lot of Gemini AI models and Gemini-powered features in enterprise apps, and AI answers appear to be boosting its core search engine and by extension the search-advertising business.
A dozen major enterprise software firms such as Salesforce and ServiceNow are collectively on pace to generate billions of dollars a year selling AI-powered features and agents in their products. They’re also major customers of Anthropic and OpenAI, both for internal use and to power the products they sell. These AI buyers have been enduring recent price hikes from Anthropic.
Despite their fast-growing revenue, the AI startups are burning huge amounts of cash—likely more than $30 billion on an annual basis from Anthropic and OpenAI alone, in large part due to AI model-training costs. While some of the startups on our list have at times operated profitably, most are not.
For instance, Cursor’s gross margin was negative 23% as of the quarter ended in January, which was unusual for a startup generating such high revenue. The company’s gross margin has since turned positive, but the results show the challenge of relying on OpenAI and Anthropic technology, especially as Anthropic raises prices.