OpenAI IPO Under Scrutiny: 28x Revenue Valuation Surpasses NVIDIA, Some Investors Prepare to Short

Gate News reports that on March 10, OpenAI, the developer of ChatGPT, is at least six months away from going public, but investment banks have already begun reaching out to public market investors to gauge interest. Eleven interviewed investors (most of whom do not yet hold OpenAI shares) have mixed feelings—some optimistic, some cautious. The IPO is expected to raise several billion dollars, potentially surpassing Saudi Aramco’s record of over $25 billion in 2019, but most are concerned about valuation and profitability prospects. OpenAI is currently valued at $850 billion (with investors including NVIDIA, Amazon, and SoftBank), which is 28 times its projected 2026 revenue, while NVIDIA’s forward price-to-sales ratio is only 12. Bob Lang, founder of trading firm Explosive Options, said he would not participate if the valuation multiple exceeds NVIDIA’s. Well-known short seller Jim Chanos directly questioned, “NVIDIA has near-monopoly status, rapid growth, and ample cash flow. Why give OpenAI a higher valuation?” He also mentioned that some investors are already preparing to short OpenAI stock. OpenAI expects to burn cash at least until 2030, and investors worry whether the funds raised from the IPO can sustain profitability. Mark Malek, Chief Investment Officer of wealth management firm Siebert Financial, compared OpenAI to a “fully loaded cargo ship,” while likening Palantir to an “F1 race car”: if Palantir loses a contract, it can lay off staff, but building a data center over five years leaves no turning back. Competitor Anthropic is seen as another variable; its CEO Dario Amodei stated at the Morgan Stanley Technology Conference this week that annual revenue has more than doubled to $20 billion, and future model training and operational costs are expected to be much lower than OpenAI’s. Some investors are beginning to believe that Anthropic may be more profitable in the long term. Anthropic also plans to go public, which could divert market attention.