Monologue: Annualized Revenues Are BS
Better Offline
Cool Zone Media and iHeartPodcasts
4.6 • 687 Ratings
🗓️ 1 August 2025
⏱️ 8 minutes
🧾️ Download transcript
Summary
In this week’s monologue, Ed Zitron walks you through how and why OpenAI and Anthropic use “annualized revenues” to hide that they’re nowhere near their yearly revenue projections.
https://www.theinformation.com/articles/anthropic-revenue-hits-4-billion-annual-pace-competition-cursor-intensifies?rc=kz8jh3
www.theinformation.com/articles/openai-hits-12-billion-annualized-revenue-breaks-700-million-chatgpt-weekly-active-users?rc=kz8jh3
Episode note: I say “$5.5 billion” for OpenAI’s potential revenue in 2025. Calculations I’ve run since suggest it could be lower - around $5.25 billion. Both of these numbers are reasonable.
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Transcript
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| 0:00.0 | This is an I-Heart podcast. |
| 0:02.6 | Guaranteed Human. |
| 0:06.0 | Callsome Media. |
| 0:09.2 | Hello and welcome to this week's Better Offline monologue. |
| 0:11.9 | I'm your host, Ed Zittron. |
| 0:17.5 | Better Offline. |
| 0:20.3 | And I've heard so many nice things from all of you about last week's haters guide to AI |
| 0:24.2 | and I really couldn't be more grateful it was a labor of love and hate in some cases I guess |
| 0:28.6 | as we approach what I see as the precipice of this hysterical era we're going to start seeing |
| 0:33.0 | and hearing big tech and big model developers make intentionally vague statements |
| 0:36.2 | with the intent of misleading |
| 0:37.5 | you and the media. And I really want to be clear, I'm sorry there's going to be some maths in |
| 0:42.1 | this, but it's necessary for you to know how people are trying to swindle you and the media |
| 0:46.3 | too. So Microsoft kicked this off this week with this week's earnings, breaking out annual |
| 0:50.6 | revenue from their Azure Cloud platform where they sell the means for people to run applications and organizations in the cloud, but also bury their AI services. |
| 0:58.1 | And they did this for the first time in history. |
| 1:00.2 | This naturally led people to say that Azure's growth, which is up 34% from 2024, when they |
| 1:05.6 | didn't disclose it, was driven by artificial intelligence somehow, despite the fact that Microsoft |
| 1:10.6 | intentionally stopped reporting on their earnings their AI revenue in January when they said they had 13 billion of annualized revenue, meaning about $1.08 billion a month. |
| 1:20.5 | And God, that term annualized is a tricky one. |
| 1:22.8 | Also, by the way, they made over $70 billion on a zero, so $13 billion of annualized revenue is actually not that much. |
| 1:28.8 | But anyway, the term annualized is a really tricky one. |
... |
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