OpenAI's $20B Revenue Miss Rocks AI Stocks, Japan Cloud Paralyzed

Full transcript

Alex: Good morning, and welcome to Daily Tech News for Saturday, October tenth, twenty twenty six. I'm Alex.

Jordan: And I'm Jordan. Alex, this one started with a number on a spreadsheet and ended with markets shaking.

Alex: It did. So the Financial Times reported that OpenAI has told investors its annualized revenue is approaching fifty billion dollars. Sounds enormous, right? Except the market had been walking around assuming seventy billion. That twenty billion dollar gap landed midday Thursday, and the selling started immediately.

Jordan: And it wasn't gentle. The Nasdaq fell one point two five percent, its worst session since mid August, and the Nasdaq one hundred dropped one point four percent, its biggest one day fall in seven weeks.

Alex: Chipmakers took it on the chin. Nvidia fell close to three percent, Intel dropped more than five percent, Oracle lost about five and a half percent, and CoreWeave fell roughly eight percent.

Jordan: The part that really matters here is the accounting story. A person familiar with the documents told the New York Times that the seventy billion number never came from OpenAI at all. It likely came from people comparing OpenAI's figures to Anthropic's, and Anthropic's number is gross revenue that includes cloud provider money, while OpenAI's fifty billion is net. So the whole selloff may be built on an apples to oranges comparison.

Alex: Which leads to the messier question. The New York Times separately reported that OpenAI is projecting about thirteen billion dollars in revenue for this year, and doesn't expect to reach the hundred billion it needs to break even until twenty twenty nine. Sam Altman says the actual numbers are much higher, but the market clearly has questions.

Jordan: You can feel the bubble debate getting louder. Remember, this comes days after Michael Burry called for a hard market crash to stop OpenAI and Anthropic from going public. Now investors are asking the real question. Can A I revenue grow fast enough to justify the hundreds of billions going into data centers and chips?

Alex: And in a related twist, Oracle reportedly may reconsider a planned thirty billion dollar investment in OpenAI. There was also a report that Oracle has been trucking natural gas to some of its server farms as a workaround for power bottlenecks. When your A I boom involves fuel on wheels, the infrastructure strain is real.

Jordan: Okay, from money to malware. Big story out of Japan this week, and it's the kind that keeps infrastructure people up at night.

Alex: IDCF Cloud, run by SoftBank subsidiary IDC Frontier, confirmed it was hit by a ransomware attack in the early morning hours of October seventh. Four hundred ninety five companies and local governments lost service. Government websites went dark, including the Ibaraki prefecture site and the prefectural police portal. A seafood logistics company couldn't receive or ship frozen food, and about twelve hundred of its business partners felt that.

Jordan: And here's the brutal part. In their third incident report, IDC Frontier said customer data in the four affected zones is unlikely to be retrievable or restorable. Customers can only recover from backups they hold themselves. They're literally being told to rebuild in a separate environment.

Alex: Think about what that means. This wasn't one company's bad day. It was nearly five hundred organizations going dark at the same moment because they all leaned on the same cloud region. That is exactly the concentration risk analysts have been warning about for years.

Jordan: The attackers claim the whole thing took seven minutes. They say they hit two hundred thirty nine hypervisors, encrypted two hundred twenty five databases totaling three point six petabytes, sealed sixteen thousand virtual machine disks, and wiped more than five hundred fifty thousand snapshots. Now, IDC Frontier hasn't confirmed those numbers, but the scale of the outage is not in dispute.

Alex: Also still unknown: whether data was stolen, how the attackers got in, and who's behind it. Japan's railway operators say up to seven point four million email records may have leaked. The company has reported the attack to its supervising ministry and the Tokyo police.

Jordan: Switching to law enforcement wins, the F B I announced another arrest in the ShinyHunters case.

Alex: Right. Director Kash Patel said agents arrested another suspected co conspirator earlier this week in the bureau's investigation of the F B I jobs site breach. The New York Times reported the suspect is a Canadian citizen arrested in Pennsylvania.

Jordan: The backstory here is wild. ShinyHunters allegedly stole personnel data from the F B I's jobs portal, which is managed by a third party vendor. Officials have been operating under the assumption that all current and former employees were exposed. Names, home addresses, social security numbers, assignments, even names of family members.

Alex: And this group is busy. F B I assistant director Brett Leatherman said the network has allegedly breached more than one hundred forty organizations and pulled in at least seventy million dollars in extortion payments. This follows the September arrest of an alleged leader in the Netherlands, where police reportedly raided with flash bangs.

Jordan: The broader trend is that attackers are going after the professional services that hold everyone else's secrets. This week Holland and Knight and Squire Patton Boggs both disclosed data breaches to state regulators, with social security numbers exposed. And Nelson Mullins got hit with a proposed class action over its own breach. Law firms are becoming the soft target of choice.

Alex: And in South Korea, two megachurches are investigating suspected attacks that may have exposed records for hundreds of thousands of congregants. Yoido Full Gospel Church disclosed a breach now estimated around eight hundred fifty thousand members, and Sarang Community Church confirmed member records stolen too. Early technical signs point to attacker activity automated by artificial intelligence.

Jordan: That's the second week in a row Korea has been in the headlines for A I driven attacks, after the agent assisted bank breaches we talked about yesterday. In a related development, a Chinese open source A I pentest tool called ARTEX was also reported in use against South Korean banks.

Alex: Time for quick hits. First, the personal agent race is heating up. A U S startup called Tab emerged from stealth this week with a three hundred million dollar valuation, just six weeks after its product launch. You send instructions over iMessage or WhatsApp, and the A I handles tasks like ordering food or scheduling. It comes as Instinct closed a round at a ten billion dollar valuation, with Meta and OpenAI launching their own agents. The benchmark scores are mixed so far, five point nine out of ten, ranking twenty first, but the money is pouring in.

Jordan: Second, malware is coming pre installed now. Security researchers are warning about a strain called Midnight Mimosa shipping inside budget Android phones in more than one hundred fifty countries. That's the kind of story that makes you rethink a bargain phone.

Alex: Third, attackers hijacked three country code domain registries to forge Google certificates. When the domain name system and certificate machinery get compromised at the registry level, that's about as fundamental as internet trust gets.

Alex: And finally, a study from Cognizant found that eighty percent of employees want to use A I more than their jobs allow, a gap they're calling the activation gap. Their researchers estimate a uniform five percent productivity increase could add roughly six trillion dollars to global G D P. Willingness is there, the study says. The hard part is the integration.

Jordan: That's the show for Saturday, October tenth. I'm Jordan.

Alex: And I'm Alex. Thanks for listening, and we'll be back tomorrow with more.