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What happened: Oracle (ORCL), AMD (AMD), CoreWeave (CRWV), and other AI-driven names sank premarket on Tuesday. Oracle and CoreWeave led the losses, down 7% and 8%, respectively.
What’s behind the move: Investors sold off shares of companies tied to OpenAI (OPAI.PVT) after the Wall Street Journal reported the AI developer recently missed sales and user targets, renewing concerns about overspending in the sector.
Citing people familiar with the matter, the report said the startup fell short of its internal goal of 1 billion weekly active users for OpenAI’s ChatGPT by year-end. It also reportedly missed its annual revenue target for the product. Meanwhile, Google’s (GOOGL, GOOG) competing AI bot, Gemini, grew over the past year, eating into OpenAI’s market share.
What else you need to know: OpenAI has been on a spending spree as CEO Sam Altman has raced to secure computing power, renewing concerns about the company’s mounting costs amid increasing competition. The WSJ story comes at a crucial time as the company reportedly prepares to go public.
Last month, OpenAI announced it closed its latest funding round, raising $122 billion in commitments at a valuation of $852 billion. That’s more than the $110 billion the company said it raised in February, when it was valued at $730 billion.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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