Summary of Key Points
OpenAI is facing a paradox on the eve of its IPO: on one hand, its revenue figures are impressive—annual revenue has surpassed $40 billion, and for the first time, its business operations have outpaced its consumer services, with remarkable growth rates. On the other hand, it is beset by problems. Within a month, several key executives (including the Chief Revenue Officer, a long-serving COO who had been with the company for eight years, and another senior executive) as well as members of the security team have resigned. Old governance issues (such as the 2023 dismissal of Otman and Musk's lawsuit) have resurfaced, casting doubt on the stability of its $85.2 billion valuation in the public market. OpenAI has already submitted its listing documents confidentially, but the timeline is uncertain. The market's concern is no longer whether there is enough demand for AI products; rather, it is whether the company can maintain its stability.
Breakdown and Interpretation
1. Revenue: Moving from a "ChatGPT Traffic Story" to a "Enterprise Software Giant Story"
OpenAI's $40 billion in revenue did not come from ordinary users using ChatGPT; instead, the company has quietly completed a business transformation:
- Drivers of Growth: The expansion of AI programming tools like Codex (which helps companies write code), subscription services (such as ChatGPT Plus), and the recently launched advertising business (inserting ads within ChatGPT).
- A Critical Turnaround: At the beginning of the year, consumer services accounted for 60% of revenue; now, enterprise services have overtaken them. The number of corporate customers has doubled to 2 million, with a much faster growth rate (32%) compared to consumer services. This indicates that corporate clients are more stable and willing to spend more on customized services, and OpenAI is directly competing with Anthropic in the corporate market.
- Remarkable Speed: Revenue increased by 20% month-on-month in July, which means an additional $8 billion was earned in just one month (on an annual basis), and the advertising business is also approaching a scale of $1 billion.
In short, OpenAI is no longer relying on consumer traffic; it has transformed into a company that sells AI tools to businesses, providing a more solid foundation for its revenue growth.
2. Valuation: Can the $85.2 Billion Valuation Be Accepted by the Market?
OpenAI is currently valued at $85.2 billion, making it one of the most expensive unlisted technology companies in the world. However, this price has stagnated in the private market, and the public market is more cautious:
- Uncertain Listing Timeline: Some suggest a delay until 2027 (with Otman hoping to wait until the valuation reaches $1 trillion before listing), while others expect it to go public this year. Underwriters are concerned about the enthusiasm of retail investors, given the volatile stock prices of companies like SpaceX after their listings.
- Doubts About the Valuation: A revenue of $40 billion corresponds to a valuation of $85.2 billion, which represents a price-earnings ratio (P/E) of 21—meaning for every $1 in revenue, the company is valued at $21. This ratio is not particularly high for technology companies, but it assumes stability. If executives keep leaving and the security team is unstable, investors will likely discount the valuation.
Therefore, OpenAI's IPO is not about whether it can go public; it's about at what price. The market will decide whether to pay for its growth based on its ability to stabilize internally first.
3. Wave of Executive Resignations: A "Red Alert" Before the IPO
The recent resignations are significant, involving key figures:
- Chief Revenue Officer (Denise): She left just eight months after taking office and was in charge of the most profitable business segment. Her departure suggests internal conflicts or her lack of confidence in the company's future.
- Long-Serving Executive (Brad): A former COO who had worked with Otman for eight years, her resignation indicates possible issues with the company culture.
- Key Members of the Security Team: The departure of the ethics and security system leaders is concerning, as AI security is critical for OpenAI. If there are security breaches (such as models escaping from sandboxes or invading systems), the company's reputation could be severely damaged.
Why is this a red alert? Investors fear that key personnel leaving could lead to operational failures. For example, if Denise leaves, could corporate customers be poached by Anthropic? With a shaky security team, who will ensure the safety of AI models?
4. Old Governance Issues: A "Time Bomb" Before the IPO
OpenAI's internal governance has always been a challenge:
- 2023 Dismissal: Otman was suddenly fired by the board and reinstated only after employees threatened to resign and investors pressured the company.
- Musk's Lawsuit: Musk invested in OpenAI thinking it was non-profit but now accuses it of becoming a for-profit organization, claiming to have been deceived. Although the jury ruled that the lawsuit was filed too late, Musk plans to appeal, which raises concerns about potential legal issues after the IPO.
Revealing these issues before the IPO signals that the company's internal management may not be ready for public scrutiny.
5. Strategic Adjustments: Brockman Taking Personal Action
In response to the turmoil, OpenAI is making adjustments:
- Centralization of Power: Co-founder Brockman is taking more direct control, engaging more with customers, and has appointed a new Chief Revenue Officer from Wiz (a company acquired by Google). He also stated that they will reevaluate underperforming management.
- Product Strategy: Previously, customers paid based on the number of tokens processed. Now, OpenAI claims the "token era" is over and offers more efficient AI solutions at lower prices (e.g., improving model coding efficiency by 54%).
- Business Expansion: The company acquired Ona to expand Codex, its AI programming tool, which now has over 10 million users, competing with Anthropic's Claude Code.
These adjustments aim to stabilize the situation and reassure investors that OpenAI can address its internal issues while maintaining growth.
In Conclusion
OpenAI is like a student with excellent grades but poor discipline: its revenue (the exam scores) are high, but investors are worried about potential problems on the day of the IPO (the actual application). Whether it receives a favorable valuation depends on its ability to improve its internal management and team stability.