The article discusses OpenAI’s use of an unconventional accounting metric called “adjusted earnings” to report its financial performance. This metric excludes certain costs like stock-based compensation and data center infrastructure, raising concerns about transparency and comparability with traditional accounting methods. The practice is reminiscent of controversial metrics used by companies like Groupon and WeWork in the past. While AI companies may have unique cost structures, the lack of standardization and potential for obfuscation has drawn criticism from accounting experts. The article highlights the need for clear and consistent reporting standards as the AI industry grows in prominence and attracts more investor scrutiny.
Source: https://www.businessinsider.com/openai-ai-adjusted-earnings-groupon-wework-accounting-2024-10