Tech Stocks Rebound Even As OpenAI Logs Heavy Losses

OpenAI logs heavy losses, even as revenue rises to $10 billion, plus tech stocks are rallying this morning on core-weave results and bullish bets from Asian AI giants. And President Trump's deal for Russia to supply diesel to the U.S. has stalled. We have not seen any ships actually reaching the U.S. with Russian diesel. It's Wednesday November 11th, I'm Sandra Kilhoff for the Wall Street Journal, filling in for Luke Vargas, and here's the AM edition of What's News, the top headlines and business stories moving your world today. We're exclusively reporting that OpenAI's third quarter revenue almost doubled to $10 billion, but that the chat G.P.T. maker continues to log heavy operating losses as it struggles to catch up with rival and throbic. Joe Stoner covers markets for Dow Jones newswires for us. Joe, what have we learned about OpenAI's finances, and more importantly, how they stack up when compared to Anthropic? Yeah, so roughly 50% revenue growth to $10 billion on quarter, that's good growth. But it all comes against the big markets over the day, which is anthropic. It's main rival looking set for an IPO next week, and the contrast between the two is pretty stark. Anthropics, not just revenues of $17 billion for the quarter, that's $7 billion ahead of OpenAI, and also anthropics losses a much narrower. A year ago, enterprises were crazy about chat G.P.T. and OpenAI was very much in the lead. That's flips over the last year. Enterprises are opting for Claude instead, and so OpenAI is having to take some measures to try and turn that around, cutting costs of models in a kind of attempt to grow market share, and it's all in kind of service of this bid to grow, paying subscribers. Now Joe, we should mention that News Corp owner of the Wall Street Journal has a content licensing partnership with OpenAI. This news around their finances, Joe, of course, comes as investors have been scrutinizing the financial health of the AI sector yesterday. We were keeping an eye on Nvidia's shares. They were rebounding, Jensen Huang returning to the office in a bid to really signal business as usual, following that spy scandal that unearthed earlier this week. We're also seeing tech stocks getting a bit of a boost this morning. Tell us more about what's driving that renewed momentum, Joe. Yeah, so this market needed a shot in the arm, and it's got one from several sources this morning, first from Taiwan, where the Taiwan semiconductor manufacturing company, this enormous chip maker, has said its board is back plans to invest $500 million a piece in anthropicon OpenAI, that's the signal of pretty strong confidence. Now Alibaba, the Chinese tech giant, has said it plans to list its semiconductor business in Hong Kong. That's not something you do if you're really worried about the AI trade more broadly. Thirdly, and maybe most important of all, core wave shares, sawing pre-market after the Neo Cloud recorded better than expected revenues in the third quarter. And now, core waves are especially important because it was at the centre of last month's AI sell-offs. And JPMorgan analysts said that the company has answered maybe investors key concern about the stock, which is that the company would struggle to fund itself as it seeks to build data centers to meet AI demand. That's what I had caused the price of ensuring core waves get to saw last month. It looks, according to JPMorgan, at least, that that comes on as answers for now. Okay, so some concerns are swaged, but Joe, I also do note in our reporting this morning around TSMC, that some analysts are cautioning the overlapping roles among AI suppliers, customers, and investors creating these very complex dependencies. I mean, it doesn't get much more cyclical than the world's largest contract chip maker, effectively investing in some of the companies that would be using their chips. Joe, thank you so much for getting across the markets with us this morning. Joe Stoner covers markets for Dow Jones Newswires. Thanks, Joe. Thanks, Hanjo. Defense Secretary Pete Hegseth survived an impeachment effort in the House Tuesday evening after Republicans effectively blocked the attempt. On this rope, the A's are 2011, the A's are 204. Thomas Massey was the sole Republican to side with Democrats who House Caucus leader Pete Aguilar said, "are expected to revive the push when they take control of Congress in January." "I'm aware of the majority. We are serious about holding people in hell here." "And I'm at that goal again, and I'm starting to breathe out of your oversight because we are not shy to use accountability." While President Trump claimed on social media that the vote exonerated Hegseth, Massey vowed that impeachment effort isn't over and said he plans to force another war-powers vote before leaving office. Nine members of the Kennedy family have joined legal efforts to block President Trump's planned triumphant arch between the Lincoln Memorial and Arlington National Cemetery. In a Tuesday court filing, family members argued the towering monument would permanently cast shadows over the graves of fallen service members and relatives, and obstruct the designed sightline from the eternal flame of President John F. Kennedy's gravesite. The challenge by the Kennedy family adds to existing lawsuits by veterans, Virginia, and DC alleging the administration lacks required congressional approval for the project, a federal district judge temporarily blocked construction of the arch last week. Trump has said the construction is an honor of the nation's 250th anniversary and that it would also serve as a military complex with snipers and drones. And President Trump's much-lotted deal for Russia to supply diesel to the U.S. to ease fuel prices ahead of the midterms has stalled. No Russian diesel has reached the U.S. since the deal was announced in early October. According to Energy Reporter Rebecca Fung, multiple U.S. bound tankers have changed course because American oil companies are unwilling to buy the controversial fuel. So the reason why there has been no buyer yet or no imports of Russian diesel into the United States are reporting shows that it's mainly because some of the U.S. buyers are just scared of international sanctions because Russian oil products have been given a waiver sanction waiver by the United States, but it's still under sanctioned by U.K. and Switzerland and these buyers and banks that my finance the deal have international operations. So they still could be sanctioned elsewhere also that there are critics of President Trump's deal and they're saying how carving out diesel from U.S. sanctions on Russia was illegal. The other reason why U.S. oil companies aren't buying the diesel is because the United States itself doesn't have a diesel supply shortage. U.S. oil companies aren't short of diesel. As a whole, U.S. actually exports more than 1.5 million barrels a day to overseas buyers, but fundamentally the price of diesel in U.S. is still high because it's tied up to international prices. That's why they don't quite need the diesel, but diesel prices are high right now in the U.S. Gas prices have fallen over the past two weeks in the U.S., though data from the AA shows a gallon of diesel will still cost you more than $6, almost double the price from a year ago. Coming up, our Luke Vargas speaks to the COOs of Reddit and Blue Sky about what role humans can play on the internet in a world where AI agents and traffic is outpacing us rapidly. That story after the break. Earlier this year, bots and AI agents overtook humans in generating the most web traffic, but that was the tame admission from the CEO of internet company Cloudflare who forecast that agent traffic could outnumber that of humans by 1,000 to one within the next five years. And with AI-generated content also cluttering up the internet at a rapid pace, it got us wondering where humans will fit on the internet of the future. At this week's Web Summit in Lisbon, Luke Vargas caught up with two people taking on that very question. Yeah, so Jen Wong, CEO of Reddit, I joined almost nine years ago. I'm Rose Wang, the CEO of Blue Sky. Yeah, most people know Blue Sky is a new micro blogging app that got a extremely popular over the last two years. Say what you will about the early internet, but according to Jen and Rose, the current internet experience of people is far from ideal. Large parts of the internet look exactly the same and function exactly the same. Can you tell the difference if you open up? You know, it's like X, threads, insert. Oh, look at the same, TikTok, they kind of look the same. And with AI search, the experience is more it just you're in your own personalized loop. You may not go to the places that are the people you may not know where other people are going. Culture has homogenized and I think we can't ignore the fact that it's a scene time that we all basically homogenized on seven different platforms. We all expect the same type of culture. And I think that what's happening with Gen Z and Gen Alpha is they're pushing back against this. I want more customization, I want more personalization. People are actually going to group chats and communities to find information. They're not necessarily going to the public spheres. And so we need new forms, new surfaces. So what could that look like? Unsurprisingly, the two thought Reddit and Blue Sky were part of the answer, though, for very specific reasons. Whereas heavily personalized feeds on some social media platforms, push users to similar posts over and over, Wong said Reddit's logged in users are harsher critics and screen what gets visibility. The upvotes have to be higher than the downvotes in order for posts to be eligible for more people to enjoy them. So it's very different in what is eligible to be seen. It's highly filtered by lots of different people who start with the context. And every post has to start in a community. And the community is a tough judge of "A specific topic, because there are usually experts in that topic." Wang did admit that, yes, people might start using AI to tidy up their once rambling Reddit posts, but she equated that to a modern spell check and said, "Even those cleaned up posts still tie back to real person's experience." Meanwhile, Blue Sky is taking more of a systems approach, enabling users to serve as labelers of AI's flop that others can then subscribe to, and then not see any of that slop. Among other things. The future is tough, because you actually need infrastructure and new technology, like encryption, as we're dealing with things like our things verified, our things human are not human, and what's really cool about Blue Sky is that we were actually built on top of new technology, where data provenance, and you can actually know that that post is written by that person, because there's an encrypted signature under the hood. All of that needs to be embedded in infrastructure that you're building, and that is the protocol that we built, basically, for the future. At the end of the day, though, both Reddit and Blue Sky want to make money, and even as AI agents make up the bulk of web traffic and a growing share of overall new content, real human interaction is a valuable commodity, so much so that Reddit's Wang said her business growth goals essentially break down into advertising and data licensing, and she had ideas about how to grow the latter. "I think models have no taste. They certainly are not going to refresh their taste to update to the latest fashion. What's a popular car? Should you get the iPhone Duo?" Those are human experiences and tastes and the experience of living with a device or whatever it is. I think we are that role, because models need grounding. They need freshness. I think you could imagine in the future, like, yes, we could be a taste layer to different enterprises, creating models who want to know what is the latest, you know, best car if you're trying to make a recommender, etc. Whereas Reddit pitches itself as the steward of its user's words as it licenses their human judgment to AI labs, Blue Sky, which is venture backed and doesn't run ads, is leaving that to the specific communities built off its but-rock code. Because Blue Sky is all about bottoms-up, user-created interfaces and experiences that other users can use, you don't have to wait for the parent company, the corporation to make that decision for you. And so you can go and create your own group. And in that group, you can do whatever you want, you can moderate it yourself, you can sell that data to people, it's your decision because you own it. And we want to make money when creators and developers make money, because that's where our incentives lie, and we'll take a small platform fee, but really it's about you taking the money home because you're the one who's creating value. Our whole hope is that the ecosystem can show that we can build something better together, or maybe we're wrong, and maybe what we want is just a kingdom owned by Zuck, maybe? That's the big bet. And we will have much more from Web Summit on Tomorrow's show, even though the annual conference has had to cancel its second day due to an unprecedented storm in Portugal. Our Luke Vargas, though, will be back on the show tomorrow. That's it for what's news for this Wednesday morning, today's show was produced by Hadi Moir and Luke Vargas. Our supervising producer was Michael Cosmitas, and I'm Sandra Killhoff for The Wall Street Journal. We'll be back tonight with a new show, until then, thanks for listening.