AI race 2026: Revenue climbs but bubble fears persist
In Q3 2025, AI companies reported significant revenue growth, easing some concerns about a potential AI bubble. This trend highlights the strengthening commercial viability of the AI industry.
Source X
Market leaders include Microsoft Azure, which reached a record annual revenue of $18.5 billion, doubling sales since the end of 2024 and quadrupling from the start of the year. OpenAI hit $13 billion, more than four times its revenue at the beginning of 2024. However, Elon Musk’s xAI and Nebius, despite heavy investments in hardware, still generate less than $1 billion annually, indicating slower conversion of capacity into actual revenue.
The revenue gap—between capital expenditure on data centers and actual income—continues to worry investors. Yet, given OpenAI’s current growth pace, the company is expected to successfully navigate its planned IPO later this year.
