• by Laurie Sullivan , 5 hours ago

Thirty-four artificial intelligence (AI)-based startups that include Anthropic and OpenAI generate nearly $80 billion in annualized revenue, or $6.6 billion per month, from selling applications based on artificial intelligence or providing access to models that power the apps. The amount has grown 112% in the past six months.

Few of these companies generated the $80 billion in existing or generated revenue before 2023. "Anthropic can claim about half that amount, as its revenue recently surpassed OpenAI’s on the strength of its AI for coding tasks and other white-collar work," according to a report published on Sunday.

OpenAI, Anthropic, Cursor, Cognition, ElevenLabs and 29 others are outlined in The Information's Generative AI Database. These companies are grouped into segments and tracked, and the data cites more than 700 software and services companies.

Anthropic and OpenAI have captured about 89% of the market -- which is 4.5 percentage points higher than the share of sales the two companies had in the same group six months ago, according to the data. 

Investment firm Sequoia Capital noted in its principles that the value resides in the application layer rather than the models, saying: "Tools people actually use will win." 

Sequoia believes that while foundation models are essential infrastructure, they will become commoditized over time.

The real, sustainable financial equity belongs to the applications interacting directly with users.

The revenue figures for the two AI leaders are somewhat inflated, considering that Anthropic and OpenAI each share a material amount with business partners.

Anthropic shares revenue with cloud-computing providers such as Amazon and Google, which resell its models to their respective customers.

OpenAI has renegotiated its agreements to allow it to partner with other cloud and technology companies, including Amazon and Google, while continuing its revenue share with Microsoft through 2030.

Payments potentially are capped at $38 billion. Until recently, OpenAI shared 20% of its revenue with Microsoft.

Search firms Perplexity, voice AI provider ElevenLabs, and coding app Cognition have crossed $500 million in annualized sales since December, joining coding app Cursor, according to the analysis, which does not include infrastructure startups that rent out Nvidia AI servers, according to the report.

The analysis does not cover public companies that generate revenue from AI applications and sales of models they developed themselves.

The report states that Microsoft has generated at least $6 billion in actual revenue from selling Copilot-branded apps, powered in part by OpenAI models that it uses for free.

Google sells Gemini AI models and Gemini-powered features in enterprise apps, and AI answers appear to have boosted its core search engine and by extension, the search-advertising business.

A dozen major enterprise software firms such as Salesforce and ServiceNow are now collectively on track to generate billions of dollars a year selling AI-powered features and agents in their products.

They are also major customers of Anthropic and OpenAI, both for internal use and to power the products they sell.