The $100B Question: Is OpenAI Worth It?

Let's start with the numbers, because the numbers are insane. OpenAI's most recent share sale in October 2025 valued the company at $500 billion. A new funding round reportedly in progress could push that to $730 billion. Revenue hit an estimated $20 billion in 2024, up from roughly $3.4 billion the year before. That's nearly 6x growth in twelve months. The company lost approximately $5 billion in the same period. So we're looking at a company valued at 25-37x its annual revenue, burning cash at a rate that'd make a pre-profit Amazon blush, facing intensifying competition from Google, Anthropic, Meta, and a growing army of open-source alternatives. Is OpenAI worth it? The honest answer: it depends entirely on which future you believe in. ## The Bull Case: Nobody's Ever Grown This Fast The revenue growth is genuinely unprecedented. Going from $3.4 billion to $20 billion in a single year isn't startup growth. ChatGPT remains the dominant consumer AI product with hundreds of millions of monthly users. Enterprise adoption is accelerating. The company just started testing ads in ChatGPT, opening up an entirely new revenue stream. The bull thesis: OpenAI has the largest user base, the strongest brand recognition, the deepest enterprise relationships, and the most developer mindshare. Even if they're not the best model on every benchmark, the ecosystem moat is what matters. Google wasn't the best search engine when it won search. It was the most integrated, most habitual, most default option. Microsoft's backing doesn't hurt either. Microsoft invested over $13 billion into OpenAI and holds a 27% stake. Azure provides compute, and the Microsoft partnership ensures distribution through Office, GitHub Copilot, and Bing. ## The Bear Case: The Math Doesn't Work (Yet) OpenAI spent over $5 billion on compute in 2024 alone. Every ChatGPT query costs real money, and hundreds of millions of free-tier users generate queries without generating revenue. Here's where it gets challenging. OpenAI's market share in consumer AI has dropped from 86.7% to 64.5% over the past year. Still dominant, but the trend line is heading the wrong direction. Anthropic is gaining ground in enterprise. Google's Gemini is embedded in an ecosystem touching billions of users. DeepSeek is eating the cost-conscious segment. Meta's Llama is making frontier-quality models free. The competition isn't just coming — it's here. Claude Opus 4.6 is competitive with or better than GPT-5.2 on many benchmarks. The moat that was supposed to protect OpenAI's position is looking more like a puddle. The corporate structure adds complexity. The ownership split — 47% employees and investors, 27% Microsoft, 26% OpenAI Foundation — creates governance headaches. Elon Musk's $97.4 billion hostile bid attempt in February 2025, while rejected, exposed how tangled things have become. And the multiples are hard to justify. At $500 billion on $20 billion revenue, that's 25x. Google trades at about 7x. Microsoft at about 12x. Even generous historical comparisons don't get you to 37x for a company that's losing money. ## What Both Sides Miss The bulls are right about the ecosystem advantage. They're wrong to assume winner-take-most. Enterprise customers are multi-model by design. Consumers have low switching costs. The bears are right about stretched valuations. They're wrong to underestimate the power of being the default. Most people don't compare chatbots. They use ChatGPT because it was first and good enough. Here's what I think both sides miss: the real risk to OpenAI isn't losing the model race. It's that the model race stops mattering. When open-source models reach parity — and they will within 18-24 months — the value shifts entirely to the application layer, distribution, and data. OpenAI's future depends on whether ChatGPT can evolve from "the best chatbot" into an indispensable platform. If it does, the valuation is justified. If it remains just a really good chatbot competing with other really good chatbots, the valuation is a house of cards. ## My Take OpenAI isn't worth $730 billion today on the fundamentals. But I wouldn't bet against them either. Sam Altman has a track record of making things that seem overvalued look cheap in retrospect. The consumer brand is the strongest in AI. The Microsoft partnership provides unmatched resources. At these multiples, you're not investing in what OpenAI is. You're investing in what it might become. And "might" costs a lot more than it used to.