Recently, global artificial intelligence companies have seen widespread adjustments in their initial public offering (IPO) valuations, with market focus shifting from technological capabilities and growth potential to actual revenue, profitability, and subsequent growth rates. According to South Korean media, affected companies such as Upstage, Wrtn Technologies, and FuriosaAI, which plan to go public, need to further demonstrate that their business models can generate sustainable revenue.
Korean AI Companies Face Profitability Challenges
U.S. AI company Anthropic recently held an IPO investor briefing, adjusting its valuation from a previous expectation of $200 billion to $150 billion (approximately 1 trillion RMB), a decline of about 25%. Reportedly, Anthropic's revenue reached $16.8 billion in the third quarter of this year, a 45% quarter-over-quarter increase, and it has achieved positive adjusted operating profit for two consecutive quarters. However, as the revenue growth rate has significantly slowed from over 100% in the previous quarter, market expectations for its valuation have also decreased.
Even if AI companies achieve rapid revenue growth and begin to turn a profit, they may not be able to maintain their previous high valuations.
It is understood that related companies in South Korea are currently facing significant profitability pressures. Upstage reported revenue of 24.8 billion KRW last year, with an operating loss of 30.5 billion KRW. The company is expanding its enterprise-level AI business, but its operating losses still exceed its revenue scale; Wrtn Technologies completed a 100 billion KRW financing in August this year, with a valuation exceeding 1 trillion KRW. Its revenue last year was 47.1 billion KRW, growing more than 15 times from 3.1 billion KRW the previous year, but it remains in an operating loss state; FuriosaAI reported revenue of 5.7 billion KRW last year, with an operating loss of 62.5 billion KRW.