Home / Business and Economy / OpenAI Revenue Discrepancy Sparks AI Stock Selloff
OpenAI Revenue Discrepancy Sparks AI Stock Selloff
9 Oct
Summary
- Wall Street stocks fell for a second day, driven by OpenAI's revenue outlook concerns.
- Major tech stocks like Nvidia and AMD experienced significant declines.
- Rising oil prices exacerbated inflation worries amid Middle East supply concerns.
U.S. stock futures showed little change after major indices experienced a notable pullback. The Nasdaq Composite and S&P 500, which had recently reached record highs, fell by 1.3% and 0.5% respectively. This downturn was largely driven by a Financial Times report indicating OpenAI's annualized revenue was approaching $50 billion, a figure lower than previously reported. This discrepancy, stemming from differing accounting methods for sales via cloud partners, raised questions about the true scale of AI demand and the financial returns on substantial investments in computing infrastructure.
Technology-heavy sectors bore the brunt of the selloff. Chipmakers and companies financing AI infrastructure saw considerable losses, with indices like the Philadelphia Semiconductor Index dropping 3.4%, and individual stocks such as Nvidia and AMD declining. Concerns about the financing required for large-scale AI projects also impacted companies like Broadcom and Oracle. Adding to market unease, oil prices surged, with U.S. crude and Brent crude futures rising significantly due to Middle East supply disruption fears and hurricane-related production cuts, intensifying inflation concerns.
Despite these pressures, Treasury yields retreated from session highs following a $22 billion auction of 30-year bonds that drew steady demand. The benchmark 10-year Treasury yield settled around 5.23%. Investors are now shifting their focus to the third-quarter earnings season, which commences next week with reports from major U.S. banks, to gauge future market direction.
