‘AI Native’ Startups Double Annualized Revenue to $30 Billion in Seven Months
The revenue picture for AI startups is brightening, a bit. In just seven months, annualized revenue at “AI native” companies selling AI models or apps has doubled, from $15 billion to more than $30 billion, according to an analysis of 32 companies from The Information’s Generative AI Database.
One problem: OpenAI and Anthropic make up nearly 85% of that revenue, while the top 10 companies by revenue—OpenAI, Anthropic, Cursor, Cognition, ElevenLabs, Midjourney, Lovable, Suno, xAI and Perplexity—make up 94%.
There’s also some double counting going on. Cursor and Perplexity, for instance, pay firms like OpenAI and Anthropic to use their models to power their products. And we haven’t even gotten into how much cash these companies are burning to generate this level of revenue—more than $20 billion on an annual basis.
But the revenue growth AI applications have seen in recent months is nothing to scoff at. In this analysis, 13 app developers have passed the important $100 million in annualized revenue milestone in the last six months. These include Suno, a consumer app for generating music that’s currently making more than $200 million in annualized revenue, and coding agent Cognition, which is currently generating $400 million in annualized revenue. Meanwhile, coding assistant Cursor has exploded to more than $1 billion in annualized revenue in the last few months.
The growing revenue suggests customers are starting to find real value from AI apps. But it also may reflect AI startups’ willingness to diversify beyond selling subscriptions. Advertising, for instance, is becoming more common. OpenEvidence, for instance, makes money by selling advertising space on its chatbot for doctors to pharmaceutical companies, similar to the way Google sells ads on its search engine.
That seems to be working well: the company was generating around $150 million in annualized revenue at the end of last year from selling one-tenth of its ad inventory. That suggests that it could generate more than $1 billion in annualized revenue if it sold the rest.
Despite the growing revenue, there’s no guarantee startups will survive long term. Coding startups Cursor and Cognition, for example, have been some of the best-performing startups of this AI era. However, they’re facing growing competition from the very companies that supply them with models—OpenAI and Anthropic—who are now offering their own coding tools. In the case of Anthropic, its Claude Code coding assistant generates as much revenue as Cursor despite Cursor having a nearly two year headstart.
So even if we expect the topline sales number from “AI native” companies to keep on growing, don’t be surprised if we see revenue growth decelerating in certain segments of this group.