What OpenAI Investors Are Risking

OpenAI today released its much-anticipated Strawberry artificial intelligence model, designed to “solve harder problems” than its previous models, as the company said in its blog post today. Here’s a problem it should try to tackle: How can investors justify investing money in the ChatGPT maker at a $150 billion valuation, the level at which OpenAI is raising money right now? (For more on that, see our scoop today about the Middle Eastern investors OpenAI is talking with).

At first glance, the valuation might not seem hard to explain. After all, OpenAI is the market leader in generative AI, which in less than two years has transformed the tech industry. Its business is taking off. Revenue, calculated on an annualized basis, has likely risen 150% since the end of 2023 to around $4 billion, we reported today. It’s not crazy to think that number could reach $8 billion on an annualized basis sometime in 2025.