OpenAI is reportedly on the verge of a roughly $500 billion valuation, a figure that would make it the most valuable private company in the world—bigger than SpaceX, TikTok’s parent company Bytedance, and even public giants like Palantir. It’s a staggering number for a company with an “astronomical burn rate.” How is this even possible?
As Axios reports, there are actually two deals in play: a SoftBank-led round valuing the company at $300 billion, which won’t close until year’s end, and a secondary sale of employee shares at a far steeper $500 billion valuation. Most of the cheaper shares have already been snapped up, leaving investors to fight over the pricier ones.
One OpenAI investor—who spoke on the condition of anonymity, citing an NDA—compared it to the dawn of the internet. “We’re in one of the biggest technology shifts [in history],” the investor tells me. “The outcomes continue to get bigger than people think.”
The investor argues that the math for investing at the $500 billion valuation is straightforward: Hypothetically, if ChatGPT hits 2 billion users and monetizes at $5 per user per month—“half the rate of things like Google or Facebook”—that’s $120 billion in annual revenue.
“That alone would support a trillion-and-a-half-dollar company, which is a pretty good return, just thinking about ChatGPT,” the investor says. “It doesn’t include all the rest of the stuff they’re working on, all the enterprise stuff, all the agentic stuff, all of the work they’re doing on hardware.”
Trillions of Dollars
The $5 figure is, admittedly, back-of-the-envelope math. Today, ChatGPT has 700 million weekly active users—and fewer than 10 percent of them pay for it.(OpenAI declined to comment on this figure.) The investor’s projections are ambitious, and they seem to discount the threat of major players like Google or Meta eating OpenAI’s lunch. “The half-a-trillion-dollar question now is, to what extent will OpenAI be able to retain the customers it has acquired, and simultaneously be able to bring its costs to a point where it can, in fact, monetize at [hypothetically] $5 per user per month,” says Arun Sundararajan, a professor at New York University’s Stern School of Business.
The bet here is that OpenAI is the next Facebook or Google. For investors buying in at $500 billion, “they’re expecting an IPO above a trillion in two to three years, otherwise the rate of return does not justify the investment,” says Glenn Okun, who’s also a business professor at NYU. That would mean leaping into the top 10 most valuable public companies in the world almost overnight. The investor says they have a longer time horizon than that, but “of course an IPO is the most sensible path given the scale of the company.” Though the investor admits, yes, the company would need to be valued at more than $1 trillion to make the investment worthwhile.
Stranger things have happened—particularly to OpenAI. In the first seven months of 2025, the company doubled its projected annual revenue to $12 billion, which suggests OpenAI is bringing in about $1 billion per month. Enterprise adoption has surged, too, reaching 5 million paying business users this month. Not to mention what potential advertising revenue could do to its bottom line. To the investor, these are signs of a company with the momentum to win: “People don’t like unprecedented things, because most people like to pattern-match,” the investor says. “Everything this company has done has been unprecedented, from the pace of its revenue growth to the AI technology.”