OpenAI IPO plans face headwinds as ChatGPT growth slows and uninstalls surge
Sensor Tower figures show monthly active user growth dropping significantly while rival Claude sees exponential downloads, raising concerns among leadership about funding future computing contracts.
OpenAI's planned initial public offering is encountering significant market headwinds as data indicates a marked slowdown in the growth trajectory of its flagship application, ChatGPT. According to market intelligence firm Sensor Tower, the app's momentum has stalled relative to competitors, coinciding with the company's preparations to list on the public markets.
The metrics from Sensor Tower highlight a concerning trend in user retention. In April, ChatGPT recorded a 132 per cent rise in uninstalls year-on-year. This figure represents a sharp increase from previous periods, with the uninstall rate jumping to a 413 per cent increase in the month following the company's February deal with the Pentagon.
While the application retains a substantially larger user base than its rivals, the rate of new adoption has decelerated considerably. Monthly active user growth, which stood at 168 per cent in January, dropped to 78 per cent by April. This deceleration contrasts sharply with the performance of competitor Claude, which recorded an 11-fold increase in downloads over the same period where ChatGPT saw only a 14 per cent year-on-year rise.
Internal reports suggest that this shift in market dynamics has triggered serious concerns within OpenAI's leadership. The Wall Street Journal reports that the company recently missed its internal targets for both new user acquisition and revenue generation. CFO Sarah Friar has reportedly expressed worry that the organisation may not generate sufficient revenue to pay for future computing contracts if growth does not accelerate.
The timing of these developments is critical for the proposed IPO. Leadership fears that without a rapid improvement in revenue and user growth, the company might struggle to fund the substantial costs associated with its expanding operations and contractual obligations.
Despite the slowing growth and rising churn, the data paints a picture of a shifting landscape where the once-explosive expansion of ChatGPT is giving way to a more cautious market environment as users uninstall the app or switch to rival chatbots.
