OpenAI Before the IPO: The Most Expensive Dream in Tech History?

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OpenAI is emblematic of the AI boom of the 2020s. But the greater the expectations, the more fragile the narrative becomes. A mega IPO is looming – perhaps as early as 2026, possibly not until 2027. So far, only one thing seems certain: when OpenAI debuts on Wall Street, it will not be an ordinary IPO but a stress test for the entire AI trade.

Internal valuation discussions range from 500 billion US dollars to one trillion dollars. This would instantly elevate OpenAI into the league of the twenty most valuable corporations in the world, reaching the dimensions of Oracle, Samsung, or Tencent. For a tech company that is barely ten years old, highly unprofitable, and engaged in a technological arms race, this is more than ambitious.

Sam Altman and the Unloved Spotlight of the Stock Market

OpenAI CEO Sam Altman himself has recently been conspicuously unenthusiastic. “Am I excited about being the CEO of a public company? Zero percent,” Altman recently said on the “Big Technology” podcast. Public markets can create value, he admitted, but the side effects of life as a public company CEO are “pretty annoying.”

It is a remarkable statement. While tech founders usually stage IPOs as the crowning achievement, Altman sounds more like a manager who knows that the stock market will soon no longer tolerate excuses. Quarterly reports, one hundred percent transparency, critical analyst questions – all of this only partially fits a company that has so far lived primarily on vision, speed, and enormous capital inflow. At the same time, everything indicates that OpenAI has little choice. “We need a lot of capital,” Altman admits. At some point, they will “break all shareholder limits.” Translated: Private funding sources are reaching their limits.

Valuation: Between 500 billion and One Trillion Dollars

OpenAI already provided a key signal last fall: an employee stock pool amounting to ten percent of the company was established – at a valuation of around 500 billion dollars at the time. This package alone is worth about 50 billion dollars. Together with already allocated shares, employee ownership amounts to around 26 percent of the company.

The scale is historic. For comparison, Meta spent around 66 billion US dollars on stock compensation between 2020 and 2025, with revenues that were many times that of OpenAI. OpenAI, on the other hand, pays an average of around 1.5 million dollars in stock-based compensation per employee – talent retention at any cost.

However, this strategy is not without risks. Stock compensation dilutes existing shares. Publicly traded corporations often compensate for this with share buybacks. OpenAI, on the other hand, will hardly be able to afford such financial maneuvers, which are familiar to mature corporations or big tech companies like Apple, Microsoft, or Meta, in the foreseeable future. The California-based company is burning through billions and planning investments that seem absurd even by Big Tech standards.

The Capital Hunger Behind the Vision

OpenAI expects to have generated around 20 billion dollars in revenue in the past fiscal year and aims for “hundreds of billions” in annual revenue by 2030. At the same time, commitments of up to 1.4 trillion US dollars for data center projects over the next eight years are on the table. It is currently expected that the ChatGPT parent will burn through more than 115 billion dollars in cash in the next three years alone, by 2029.

Meanwhile, OpenAI is securing fresh capital on the secondary market. In the latest funding round, the AI company aims to raise 100 billion dollars – at a valuation of up to 830 billion dollars. SoftBank alone has already committed to an investment of 30 billion dollars, even selling Nvidia shares for it. Further funds are to come from sovereign wealth funds, including those from the Middle East.

Competitive Pressure: The Myth of Invincibility is Cracking

Since the launch of ChatGPT in November 2022, OpenAI has been considered the uncatchable pacesetter in the AI race. This dominance has increasingly eroded over the past year. Google's Gemini models have caught up significantly. Anthropic is also gaining market share in the enterprise segment. At the same time, powerful models like DeepSeek are emerging from China at a fraction of the cost.

Internally, OpenAI is reacting nervously. Sam Altman has reportedly declared “Code Red” multiple times – an internal alarm level that underscores how seriously the competition is being taken. Alphabet, in particular, could become a significant threat to the AI newcomer. No other Big Tech corporation combines so much AI talent, data access, and infrastructure under one roof.

Scott Galloway: Fear of the “Netscape Moment”

It is also striking how heavily OpenAI has recently relied on marketing. For the second time in a row, the US company is running a Super Bowl ad in February, costing several million dollars for 60 seconds of airtime. The fact that OpenAI, despite 800 million weekly users, considers it necessary to advertise so aggressively in traditional media can certainly be interpreted as a warning signal.

Marketing professor and tech analyst Scott Galloway, meanwhile, sees OpenAI at a crossroads this year. For the bestselling author (“The Four”), OpenAI is the crucial point of the entire AI trade. If the company fails, there will be “no safe haven left anywhere” in the entire US stock market. AI has driven 80 percent of stock market gains since 2022 – OpenAI is at the center of the AI hype.

Galloway speaks of a possible "narrative shock": the moment when investors realize that the AI growth promise is not materializing could burst the bubble. “OpenAI could thus be the Netscape of our time: the pioneer who enjoys its moment in the spotlight and is then supplanted by an established giant,” Galloway concludes. As a reminder, Netscape dominated the early internet in the 90s with its browser – until Microsoft quickly caught up with Explorer and, above all, its ecosystem.

IPO as a Litmus Test for the AI Boom

A lot is also at stake for Nvidia, Microsoft, Oracle, and AMD. Their valuations depend on the AI narrative – and on customers like OpenAI. If this story collapses, things will get uncomfortable. The OpenAI IPO is thus likely to become a referendum on the future of artificial intelligence as a business model. Can a startup with extreme capital requirements, unclear profitability, and growing competition deliver billions in returns sustainably? OpenAI is growing rapidly, has shaped the zeitgeist of the AI hype of the past three years, and currently possesses enormous resources. However, the closer the IPO gets, the less visions will matter and the more the path to profitability will.

(mack)