Like a kid playing dress-up in their parent’s clothes, OpenAI is trying to look all grown up. But it still has quite a ways to go.
Earlier this week, OpenAI announced that its ads business hit a $1 billion annualized revenue run rate.
For those less trained in finance-bro vocabulary, “annualized revenue run rate” is basically a way of saying, “If we keep earning revenue at the exact same rate we are now, this is how much we’ll make in a year.”
The metric isn’t particularly helpful for companies whose revenue numbers fluctuate throughout the year, such as brands selling seasonal products. In fact, annualized run rates can be pretty misleading in that case, like if an ice cream brand made projections based solely on its July sales.
But for nascent businesses that are actively and consistently growing – like OpenAI’s ads biz – an annualized revenue run rate can be a useful projection of the coming year.
