By Emily Bary and Britney Nguyen
As OpenAI’s valuation heads even higher, there’s more pressure on the company to generate revenue. The ChatGPT creator has a few fresh initiatives in the works.
OpenAI has made a few recent moves that signal a more serious focus on monetization ahead.
OpenAI is reportedly worth about $500 billion. Now comes the hard part – living up to that valuation.
The fresh valuation, which comes after the sale of shares to investors including SoftBank and which was reported by the Wall Street Journal and others, reflects the high hopes that investors have for the maker of ChatGPT. OpenAI is certainly spending to pursue its big ambitions, but in order to justify its valuation, the privately held company will have to improve its revenue performance as well.
According to S&P Global analysts led by David Tsui, “there are no signs that returns on investments are an investor priority.” The analysts made those comments in a note earlier this week discussing the reported $500 billion and $183 billion valuations, respectively, for OpenAI and rival Anthropic.
But as artificial-intelligence spending ramps up further and companies throughout the ecosystem take on debt to finance AI efforts, investors could get more discerning. J.P. Morgan’s Brenda Duverce wrote in August that “with profitability not expected until 2029” and a valuation of enterprise value to revenue that far outstripped those for the group of megacap tech companies known as the Magnificent Seven even before the latest share sale, “investor expectations may be tested.”
Perhaps that’s why OpenAI has made a few recent moves that signal a more serious focus on monetization ahead. “We believe OpenAI is finally getting its act together as it focuses on ‘growing into its valuation’ and is now aiming to grow into its valuation by targeting two of tech’s biggest markets: e-commerce and advertising,” Roth Capital Partners analyst Rohit Kulkarni said in a note to clients on Wednesday.
CNBC reported earlier this year that the company was on track to triple its annual revenue in 2025 – though only to about $13 billion. J.P. Morgan analysts noted in July that the company saw annual recurring revenue of $10 billion in the first half of the year, a number they said was “dwarfed” by $63 billion in “capital raised for AI infrastructure and talent.” In September, The Information reported that OpenAI expected to burn $115 billion in cash through 2029.
All the while, the company’s valuation has swiftly risen from $300 billion just about six months ago.
OpenAI didn’t return a MarketWatch request for comment on the valuation or cash-burn estimate.
Just 15 public companies were worth more than $500 billion as of Wednesday’s close, and they are all expected to see well over $13 billion in revenue this calendar year.
While OpenAI has some paid options for ChatGPT plans, a new revenue opportunity lies in helping to facilitate commerce. The company announced earlier this week that it was partnering with Etsy Inc. (ETSY) for a ChatGPT service called Instant Checkout that will let customers make purchases from within a chat.
The feature will let ChatGPT broaden its monetization approach beyond individuals. “Merchants pay a small fee on completed purchases, but the service is free for users, doesn’t affect their prices, and doesn’t influence ChatGPT’s product results,” the company said in a blog post. As the rise of buy-now-pay-later operators has shown, some merchants are willing to pay for the ability to drive more checkout conversions.
OpenAI’s other emerging monetization push could come within advertising and social media. The company is reportedly building out an advertising operation, according to the tech-industry publication Sources and others. OpenAI could potentially debut ads in ChatGPT search results and in Sora, its new social-media app that focuses on AI-generated videos.
See also: OpenAI wants to build a social-media business. Can its Sora app take on Meta and Google?
With Sora, “success depends on whether AI-native video seems like a compelling new content category or just a novelty,” Kulkarni wrote. “Ads are possible, but only once OpenAI stabilizes engagement and addresses safety concerns.” And there admittedly are questions about whether users will be willing to shop within ChatGPT or take kindly to future advertisements in their chat output.
OpenAI’s actions have far-ranging implications, at least in the eyes of investors, who’ve punished some software stocks this year on fears that people would increasingly start using ChatGPT for functions currently served by traditional software.
The company has a developer day coming up on Oct. 6, and analysts at UBS said in a Wednesday note that software and internet investors will be looking for product announcements that could signal a disruption to their holdings.
The same goes for investors in Nvidia Corp. (NVDA), Oracle Corp. (ORCL) and Microsoft Corp. (MSFT), the UBS team said, as shareholders of those companies are “banking on OpenAI scaling in order to fund its compute investments.”
In July, the AI startup said it had entered an agreement with Oracle to develop 4.5 gigawatts of additional data-center capacity for its Stargate infrastructure project – an investment that will cost the companies more than $300 billion over the next half-decade.
Additionally, Nvidia said late last month that it is preparing to deploy millions of its graphics processing units to support OpenAI’s training and running of next-generation AI models. Under the agreement, Nvidia will provide at least 10 gigawatts of its systems for OpenAI and will progressively invest up to $100 billion following the deployment of each gigawatt.
Read: The AI trade increasingly hinges on OpenAI – and that’s a big risk for the entire market
-Emily Bary -Britney Nguyen
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10-02-25 1242ET
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