Azeem Azhar

As I argued, you need to add a risk premium to all of this.

So call it 25%, so an 8% risk premium on that.

At 25%,

OpenAI would need to turn into a company of a scale of $1.5 trillion by 2030.

Now, that's a big, big company that is somewhere between Tesla, Broadcom, and Meta platforms, all established companies in the case of Meta and Broadcom, with really substantial revenues and quite low multiples.

So my gut reaction to all of this was, there's no way this could be the case, right?

That was what I was thinking while I was on my phone, walking home, did some mental maths, and I thought, hey, there's no way they can get there.

But when I sat down with Excel and a pencil and paper and went back over my own model of open AI, I started to think through whether that gut reaction was right.

And so here's a bull case, just presenting a little bit of maths.

Today, OpenAI's revenue run rate is approaching $12 billion per annum, and it's likely to end the year at an annualized rate that'll be closer to $20 billion.

It's growing incredibly quickly.

In 2023, it had revenues of about $1.6 billion.

There have been a number of leaks of the investor decks that OpenAI has been shopping around to the capital markets.

And a recent one showed that they were forecasting $125 billion of revenue in 2029.

And actually, that was an increase on a previous leak, which had had that number of $100 billion.

And by 2029, they will finally be profitable.

They'll be generating more than $12 billion of free cash flow.

Later leaks suggested that even at the point at which they're raising revenues of $125 billion, they're still growing pretty quickly.

What does that mean in terms of profits?

Well, the leaks that I have seen, which have been in the mainstream media, don't talk about how