OpenAI Valuation in 2025: Inside the $500 Billion AI Giant and Its Road to a $1 Trillion IPO

OpenAI is now one of the most valuable private companies in history — and one of the most controversial.

After an October 2025 secondary share sale led by SoftBank and other investors, the ChatGPT maker hit a $500 billion private valuation, with employees selling about $6.6 billion worth of stock at that price. ^[1] At the same time, Reuters reports that OpenAI is also laying the groundwork for an IPO that could value the company at up to $1 trillion as early as 2026–2027. ^[2]

Yet the company is still deeply loss-making, is committing more than a trillion dollars to AI infrastructure, and faces intensifying competition from Google, Anthropic and a growing open‑source ecosystem. ^[3]

This article walks through:

• How OpenAI’s valuation got to $500 billion
• What the latest revenue and loss numbers look like
• Why banks and analysts are modeling a path to a $1 trillion IPO
• The risks that could puncture the hype

1. Where OpenAI’s valuation stands today

A $500 billion private valuation

On October 2, 2025, Reuters reported that OpenAI reached a $500 billion valuation via a secondary share sale in which current and former employees sold roughly $6.6 billion of stock to investors including SoftBank, Thrive Capital, Dragoneer, Abu Dhabi’s MGX and T. Rowe Price. ^[4]

Key points from that deal:

• It was a secondary sale — money went to employees and early holders, not the company itself. ^[5]
• The sale followed an earlier $300 billion valuation used for a prior funding round. ^[6]
• OpenAI had authorized over $10 billion worth of stock for potential secondary sales, suggesting strong demand for exposure at these levels. ^[7]

Separately, as part of a corporate overhaul in late October 2025, OpenAI converted its for‑profit arm into a public benefit corporation in a deal with Microsoft that also pegged the company’s value at roughly $500 billion. ^[8] The non‑profit OpenAI Foundation now controls 26% of the shares, with warrants to earn more if the company hits certain milestones. ^[9]

How big is that in context?

• At $500 billion, OpenAI is widely described as one of the most valuable private companies in the world and, for a time, was often cited as the most valuable. ^[10]
• On December 5, 2025, however, Reuters reported that SpaceX is launching a secondary share sale valuing it at $800 billion, double its previous $400 billion level — pushing OpenAI into (at least) second place among private firms by valuation. ^[11]

Even so, OpenAI is still the clearest pure‑play bet on frontier AI among mega‑valued private companies, which is partly why investors have been willing to pay such rich multiples.

2. The valuation journey: from $14 billion to $500 billion

OpenAI’s valuation curve over the past few years has been almost vertical:

• 2021 – ~$14 billion
  Reuters notes that OpenAI’s valuation was around $14 billion in 2021, before ChatGPT’s explosive public debut. ^[12]
• Early 2023 – ~$29 billion
  Internal and press reports around a staff‑liquidity tender placed OpenAI near $29 billion after ChatGPT’s initial breakout. ^[13]
• February 2024 – ~$86 billion
  A tender offer allowing employees to sell shares suggested a valuation around $86 billion, according to reporting cited by Reuters and other outlets. ^[14]
• October 2024 – ~$157 billion
  OpenAI raised $6.6 billion in a convertible‑note deal led by Thrive Capital, with participation from Microsoft, Nvidia, SoftBank and others, at an implied $157 billion valuation. ^[15]
• Early 2025 – ~$300 billion
  Analysts and startup trackers describe a $40 billion primary round in early 2025 that pushed OpenAI’s valuation to about $300 billion, the largest private tech funding deal on record. ^[16]
• October 2025 – $500 billion
  The SoftBank‑backed $6.6 billion secondary share sale set the current headline valuation of $500 billion. ^[17]

That’s more than a 35x increase in valuation in roughly four years, off revenue that was close to zero in 2021. ^[18]

3. The financial engine: revenue, growth and massive losses

Revenue: from millions to tens of billions in record time

Several independent datasets and leaks paint a consistent picture of ferocious top‑line growth:

• OpenAI generated about $3.6 billion in revenue in 2024, according to investor materials cited by Reuters. ^[19]
• By the first half of 2025, it had already booked $4.3 billion in revenue, about 16% more than all of 2024, with a full‑year target of $13 billion and a cash‑burn target of $8.5 billion. ^[20]
• Epoch AI’s revenue analysis estimates that annualized revenue grew from $2 billion at the end of 2023 to $13 billion by August 2025, a roughly 3.2x yearly growth rate, and projects that OpenAI could surpass a $20 billion annualized run rate by the end of 2025. ^[21]
• A deep‑dive by Barclays, summarized by Business Insider, says OpenAI is running about 15% ahead of its own 2025 revenue forecast and roughly 50% ahead of prior 2027 projections. The bank now models $100 billion in annual recurring revenue by 2027, driven by user growth, enterprise adoption and new streams like ads and AI agents. ^[22]

Taken together, these suggest 2025 revenue somewhere in the $13–20 billion range, depending on how aggressively you count run‑rate versus realized sales.

Losses and cash burn: AI at any cost

The flip side of that growth is enormous spending:

• In the 2024 funding round, OpenAI told investors it expected over $5 billion in losses on $3.6 billion of revenuethat year. ^[23]
• Financials reported to shareholders and summarized by Reuters show that in the first half of 2025, OpenAI burned $2.5 billion in cash, with $6.7 billion in R&D costs and about $17.5 billion of cash and securities on hand. ^[24]
• Carnegie Investment Counsel estimates OpenAI’s 2025 revenue run rate at more than $20 billion, but highlights that the company has made around $1.4 trillion in long‑term commitments to data‑center infrastructure over the next eight years and doesn’t expect to be free‑cash‑flow positive until 2030. ^[25]
• TechCrunch, drawing on leaked documents and analysis by Edward Zitron, reports that OpenAI may have spent roughly $3.8 billion on inference in 2024, rising to about $8.65 billion in the first nine months of 2025 — implying that the cost of running its models alone could be higher than its current revenue. ^[26]

Some Wall Street commentary, based on Microsoft’s reported share of OpenAI’s results, suggests the startup may have posted quarterly losses north of $12 billion at one point in 2025, though that figure is stitched together from partial disclosures and should be treated as indicative rather than precise. ^[27]

Revenue vs. valuation: how rich is $500 billion?

If you take:

• $500 billion valuation
• ~$13 billion in 2025 revenue (original full‑year target) ^[28]

…you get a price‑to‑sales multiple of roughly 38x. If you instead use a $20 billion run‑rate figure (the high end of recent estimates), you get around 25x sales.

For comparison, Nvidia, the poster child of the public AI boom, currently trades at about 24x trailing sales, according to multiple independent financial data providers. ^[29]

In other words, depending on which revenue baseline you use, OpenAI is valued at roughly similar or somewhat higher revenue multiples than Nvidia, despite being privately held, unprofitable and far smaller in absolute revenue terms.

4. The $1 trillion question: Is a record‑breaking OpenAI IPO coming?

What Reuters and others report

On October 30, 2025, Reuters published an exclusive stating that OpenAI is preparing for an IPO that could value the company at up to $1 trillion, potentially one of the largest listings ever. ^[30]

According to that reporting:

• OpenAI is considering filing with regulators as early as the second half of 2026.
• Internal discussions have explored raising at least $60 billion, possibly more, in the offering.
• CFO Sarah Friar has told some associates the company is aiming for a 2027 listing, though advisers say it could happen sooner depending on markets. ^[31]

Other outlets, including Yahoo Finance, VT Markets and multiple investor notes, echo the $1 trillion IPO target, with timelines centered on 2026–2027 and capital raises of $60–70+ billion. ^[32]

“IPO is not on the cards right now”

Just one week after the IPO scoop, however, Reuters reported on comments from CFO Sarah Friar at The Wall Street Journal’s Tech Live conference:

“IPO is not on the cards right now… we are continuing to get the company into a state of constantly stepping up into the scale we are at.”  ^[33]

In the same piece, Reuters reiterated that:

• The late‑October restructuring into a public benefit corporation, under the umbrella of the OpenAI Foundation, valued the company at about $500 billion.
• The non‑profit now owns 26% of OpenAI Group and holds warrants for additional equity, aligning mission oversight with financial upside. ^[34]

So the picture is:

• Yes – OpenAI is clearly preparing its structure, cap table and governance for a possible mega‑IPO.
• No – Management doesn’t want to be boxed into a specific timeline while it is still burning billions in cash and racing to scale.

5. How investors and analysts justify OpenAI’s valuation

Despite the eye‑watering multiples, there is a financial story behind the $500B–$1T numbers.

1. Growth rates with few historical parallels

Epoch AI finds that OpenAI’s annualized revenue has been growing around 3.2x per year since late 2023, faster than nearly all large tech companies at a similar scale, and that its trajectory from $1B to >$10B echoes or beats past growth spurts at firms like Google, Uber and Moderna. ^[35]

Barclays’ research, as summarized by Business Insider, argues that OpenAI is 15% ahead of its 2025 revenue plan and 50% ahead of its 2027 plan, and could realistically reach $100 billion ARR by 2027 if it continues adding tens of millions of active users each month and upsells more of them into paid tiers or enterprise products. ^[36]

SaaStr’s breakdown of OpenAI’s financials describes an “OpenAI crosses $12 billion ARR” moment in mid‑2025, with a path to $15–20 billion in 2025 revenue and a target of $125 billion by 2029, alongside a long‑run ambition to reach a trillion‑dollar market cap. ^[37]

2. New revenue streams beyond subscriptions

Analysts see multiple levers that could support those projections:

• Subscriptions: ChatGPT Plus and enterprise tiers are already generating billions, with conversion from free to paid currently in the low single digits — leaving large headroom if user growth continues. ^[38]
• API and platform: Rapidly growing usage by developers and enterprises embedding GPT models into their own products. ^[39]
• Advertising: Monetizing the free tier of ChatGPT with sponsored results and shopping referrals; Barclays notes that a nascent “shopping referral” and ad business is already taking shape. ^[40]
• AI agents (“digital employees”): Emerging “agents‑as‑a‑service” that can handle multi‑step work for businesses could become high‑margin recurring revenue if they gain traction. ^[41]
• Cloud and infrastructure: Longer term, OpenAI could sell access to its own AI‑native data centers, competing with or complementing hyperscalers. ^[42]

Under bullish scenarios, investors essentially assume that OpenAI will:

1. Maintain a dominant position in frontier models,
2. Capture a large share of productivity gains generated by AI across the global economy, and
3. Eventually run a business with profit margins closer to software or cloud infrastructure than to capital‑intensive hardware.

6. The other side: risks, skepticism and talk of an AI bubble

Not everyone thinks the math adds up.

Enormous spending commitments

Both Carnegie Investment Counsel and Epoch AI stress how aggressive OpenAI’s capital plans are. Carnegie estimates $1.4 trillion in infrastructure commitments through around 2033 and notes that matching this with internally generated cash could require revenue growth approaching triple‑digit percentages each year for the rest of the decade — numbers that would dwarf even Google’s early‑2000s trajectory. ^[43]

Barclays, meanwhile, sees $450–650 billion in compute obligations for OpenAI between 2024 and 2030 alone, with the rest stretching beyond 2030. ^[44]

Competition and slowing ChatGPT momentum

A December 2025 Washington Post investigation highlights that ChatGPT’s user growth is slowing, especially in key markets, while Google’s Gemini is gaining ground thanks to deep integration in Google’s existing products and viral features. ^[45]

The piece also notes that:

• OpenAI has taken in roughly $57–58 billion in funding, more than any prior startup, from investors including SoftBank and UAE sovereign wealth funds. ^[46]
• Some Deutsche Bank analysts believe OpenAI’s “path to survival looks narrow” given the scale of expected losses. ^[47]

Bubble concerns and “too big to fail” worries

Commentary from investors, journalists and bloggers increasingly frames OpenAI as the epicenter of a potential AI bubble:

• A Carnegie note warns that if OpenAI falls short on its commitments, the impact could ripple through chipmakers, cloud providers and data‑center operators banking on its capex. ^[48]
• TechCrunch and independent analysts point out that inference costs alone may exceed revenue, raising questions about long‑term unit economics and pricing. ^[49]
• Opinion pieces on Medium argue that a $500 billion valuation represents “market gravity breaking,” and that leaked forecasts of double‑digit‑billion annual losses into 2026–2027 could become unsustainable if investor sentiment turns. ^[50]

Even some banks worry that if AI valuations unwind sharply, it could chill equity markets more broadly; Reuters recently wrote that 2026’s strong Asia IPO pipeline could be tested by “AI bubble” concerns and the performance of giants like OpenAI. ^[51]

7. Microsoft’s stake: how much of that $500B belongs to Redmond?

The Microsoft–OpenAI relationship is central to how markets think about OpenAI’s valuation.

• Following the 2024–2025 restructuring, Microsoft is widely reported to own about 27% of OpenAI’s for‑profit entity, now the public benefit corporation. ^[52]
• At a $500 billion valuation, that stake would be worth roughly $135 billion on paper, with some analyst estimates pushing nearer to $150 billion depending on how you treat options and warrants. ^[53]
• Leaked and reported documents suggest Microsoft currently captures a large portion of OpenAI’s revenue via Azure, since most OpenAI inference runs on Microsoft’s cloud, and also shares in its losses. ^[54]

Many equity analysts therefore see Microsoft as a “safer” way to play OpenAI’s upside: if OpenAI’s $500B–$1T valuation sticks, Microsoft benefits; if it doesn’t, Microsoft still has a massive, diversified software and cloud business to fall back on. ^[55]

8. How sustainable is a $500B–$1T OpenAI valuation?

Ultimately, the debate comes down to a few big questions:

1. Can OpenAI actually reach $50–100B+ in revenue before capital markets tire of subsidizing its burn?
   • Bulls point to historical precedents like Google, Apple and Nvidia, and to early signs that OpenAI is beating its own forecasts. ^[56]
   • Skeptics note that no company has ever gone from roughly $10B to $100B in revenue as quickly as OpenAI’s 2027–2028 targets imply. ^[57]
2. Will OpenAI maintain technological leadership?
   • Benchmarks now show Google’s Gemini ahead of OpenAI models on some “intelligence” indices, and open‑source models are closing the gap for many tasks at much lower cost. ^[58]
3. Can unit economics flip from negative to strongly positive?
   • That depends on lowering compute costs (via custom chips and better infrastructure deals), raising prices, or both — all while facing competition from hyperscalers and open models. ^[59]
4. What happens if the AI cycle cools?
   • With hundreds of billions of dollars in AI‑linked capex planned by chipmakers, cloud providers and data‑center REITs, an OpenAI stumble could reverberate far beyond one startup’s cap table. ^[60]

For now, investors are effectively betting that OpenAI will grow into its valuation faster than gravity can pull it back down — that this is less like Pets.com, and more like catching Google, Apple or Nvidia a few years before they became trillion‑dollar giants.

9. What to watch next

For anyone tracking OpenAI’s valuation story — whether as an investor, founder or just an interested observer — several milestones will matter over the next 12–24 months:

• Quarterly revenue and cash‑burn updates: Do 2026 numbers confirm the trajectory toward $50–100B in annual revenue, or show a slowdown? ^[61]
• New compute deals and capex clarity: Details on data‑center partnerships (Nvidia, AMD, Broadcom, hyperscalers, colocation players like NEXTDC) and how much of the $1.3–1.4T in commitments is locked vs. flexible. ^[62]
• Product traction vs. Gemini and Claude: ChatGPT’s user growth, enterprise adoption and ecosystem vs. Google and Anthropic will feed directly into revenue forecasts and perceived moat. ^[63]
• Regulatory and geopolitical shifts: AI safety rules, export controls on chips and potential government support or guarantees for AI infrastructure financing could all reshape OpenAI’s cost of capital. ^[64]
• Formal IPO filings: A confidential or public S‑1 in 2026 or 2027 would finally reveal audited financials and give public markets the chance to vote on a trillion‑dollar story with real money.

Until then, OpenAI’s $500 billion valuation sits at the intersection of extraordinary revenue growth, staggering cash burn and an AI boom that many fear could either transform the global economy — or end up as this decade’s defining bubble.

Note: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security.

References

1. www.reuters.com, 2. www.reuters.com, 3. blog.carnegieinvest.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.reuters.com, 10. medium.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.saastr.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.saastr.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. epoch.ai, 22. www.businessinsider.com, 23. www.reuters.com, 24. www.reuters.com, 25. blog.carnegieinvest.com, 26. techcrunch.com, 27. www.linkedin.com, 28. www.reuters.com, 29. www.financecharts.com, 30. www.reuters.com, 31. www.reuters.com, 32. finance.yahoo.com, 33. www.reuters.com, 34. www.reuters.com, 35. epoch.ai, 36. www.businessinsider.com, 37. www.saastr.com, 38. www.businessinsider.com, 39. www.saastr.com, 40. www.businessinsider.com, 41. www.businessinsider.com, 42. blog.carnegieinvest.com, 43. blog.carnegieinvest.com, 44. www.businessinsider.com, 45. www.washingtonpost.com, 46. www.washingtonpost.com, 47. www.washingtonpost.com, 48. blog.carnegieinvest.com, 49. techcrunch.com, 50. medium.com, 51. www.reuters.com, 52. www.marketwatch.com, 53. seekingalpha.com, 54. techcrunch.com, 55. www.marketwatch.com, 56. www.businessinsider.com, 57. epoch.ai, 58. www.washingtonpost.com, 59. blog.carnegieinvest.com, 60. blog.carnegieinvest.com, 61. epoch.ai, 62. blog.carnegieinvest.com, 63. www.washingtonpost.com, 64. www.reuters.com