OpenAI is reportedly on the verge of a roughly $500 billion valuation, a determine that might make it probably the most invaluable private company on the planet—greater than SpaceX, TikTok’s mother or father firm Bytedance, and even public giants like Palantir. It’s a staggering quantity for an organization with an “astronomical burn rate.” How is that this even doable?
As Axios reports, there are literally two offers in play: a SoftBank-led spherical valuing the corporate at $300 billion, which gained’t shut till 12 months’s finish, and a secondary sale of worker shares at a far steeper $500 billion valuation. A lot of the cheaper shares have already been snapped up, leaving traders to struggle over the pricier ones.
One OpenAI investor—who spoke on the situation of anonymity, citing an NDA—in contrast it to the daybreak of the web. “We’re in one of many greatest expertise shifts [in history],” the investor tells me. “The outcomes proceed to get greater than folks suppose.”
The investor argues that the mathematics for investing on the $500 billion valuation is simple: Hypothetically, if ChatGPT hits 2 billion customers and monetizes at $5 per consumer monthly—“half the speed of issues like Google or Fb”—that’s $120 billion in annual income.
“That alone would help a trillion-and-a-half-dollar firm, which is a reasonably good return, simply fascinated about ChatGPT,” the investor says. “It does not embrace all the remainder of the stuff they’re engaged on, all of the enterprise stuff, all of the agentic stuff, all the work they’re doing on {hardware}.”
Trillions of {Dollars}
The $5 determine is, admittedly, back-of-the-envelope math. At the moment, ChatGPT has 700 million weekly active users—and fewer than 10 percent of them pay for it.(OpenAI declined to touch upon this determine.) The investor’s projections are formidable, and so they appear to low cost the specter of main gamers like Google or Meta consuming OpenAI’s lunch. “The half-a-trillion-dollar query now’s, to what extent will OpenAI be capable of retain the shoppers it has acquired, and concurrently be capable of carry its prices to some extent the place it could possibly, in reality, monetize at [hypothetically] $5 per consumer monthly,” says Arun Sundararajan, a professor at New York College’s Stern College of Enterprise.
The wager right here is that OpenAI is the following Fb or Google. For traders shopping for in at $500 billion, “they’re anticipating an IPO above a trillion in two to a few years, in any other case the speed of return doesn’t justify the funding,” says Glenn Okun, who’s additionally a enterprise professor at NYU. That might imply leaping into the highest 10 most respected public firms on the planet nearly in a single day. The investor says they’ve an extended time horizon than that, however “after all an IPO is probably the most wise path given the size of the corporate.” Although the investor admits, sure, the corporate would have to be valued at greater than $1 trillion to make the funding worthwhile.
Stranger issues have occurred—notably to OpenAI. Within the first seven months of 2025, the corporate doubled its projected annual income to $12 billion, which suggests OpenAI is bringing in about $1 billion monthly. Enterprise adoption has surged, too, reaching 5 million paying enterprise customers this month. To not point out what potential advertising revenue may do to its backside line. To the investor, these are indicators of an organization with the momentum to win: “Individuals do not like unprecedented issues, as a result of most individuals wish to pattern-match,” the investor says. “Every thing this firm has carried out has been unprecedented, from the tempo of its income progress to the AI expertise.”
