Key insights
- OpenAI's enterprise revenue has surpassed consumer revenue, reaching $40 billion ARR. The company is impacting Google Search, with an estimated 20% of search queries being rerouted through AI chatbots like ChatGPT and Claude. This shift is contributing to a slowdown or decline in Google's search revenue, while OpenAI sees significant user growth and adoption of its coding models.
In the Loop host Ejaaz Ahamadeen breaks down how OpenAI's (OPAI.PVT) enterprise revenue has overtaken consumer revenue, even as it has begun to eat into Google Search (GOOG).
Now, if you look at Open's publicly stated figures, they hit around $40 billion ARR back in August, and also in August, their CFO, Sarah Fryer, said for the first time ever that their enterprise revenue had flipped consumer revenue. Remember, Open Air had always been kind of like the consumer AI company. They'd made most of their money through consumer subscriptions, etc. Now it's mainly on enterprise, which mimics the same pattern that Anthropic's been seeing.
And since then, I've observed that that trend has just accelerated deeper. I mean, firstly, the 20% of all Google search query figure is absolutely insane, and it confirms the fears that people had when Google had their recent earnings last week, where it basically revealed that their search revenue for, I think the third straight quarter in a row has slowed down or is starting to even decline.
And the speculation behind that is because a lot of search queries are now being rerouted through ChatGBT or Claude or other chatbot LLMs. The point being that AI LLMs are a much better experience than going to Google search. AI mode isn't something that Google has been able to monetize. And if you look at ChatGBT, which is still a young company, the fact that they've been able to eat into one of the biggest companies in the world, biggest revenue drivers is insane.
And the user numbers back it up. They've added 200 million weekly active users in the last two months. And it's not just people using ChatGBT, it's people absolutely loving their coding models as well. Codex, which is their coding interface, the comparison is, I guess, Anthropic's cloud code, has skyrocketed to the point where a lot of software engineers, I know friends of mine that like love Claude code, have actually flipped over and switched over to use Codex, citing
advantages such as cheaper cost, better workflow, and just better models in general. But the craziest bit of evidence for this is what I've observed over the last 72 hours, which is open air's poached two of Anthropic's key leaders, which led the creation of Claude Code. Cat Woo, who led product at Claude code for I think over two years, so she probably nested around $100 million or something like that, something crazy like that, announced that she had resigned.
And then literally, I think it was less than 24 hours later, tweeted again saying, I'm joining Open AI to lead a bunch of their efforts including Codex. And the other guy, Austin Lao was the first growth hire at Anthropic, so you can kind of consider him one of the OGs or lead growth heads at Anthropic. So if you combine these two hires, it's very obvious to see what Open AI is trying to do. Number one,
they have an enticing enough product, be it a coding product or an AR model in general behind the scenes, which has convinced some of the best talent to leave a very cushy position to join their company and do the same thing there.