Azeem Azhar

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

OpenAI envisages its profit levels in 2029 or 2030, but roughly EBITDA, which is a key measure of that, is roughly the free cash flow, plus and capex, minus depreciation and amortization.

And if serving costs

of serving these complex models fall through the use of efficiency techniques, improved algorithms, improved routing, custom silicon.

We just heard today that Broadcom is going to be building specific chips for open AI.

Tens of billions of dollars of EBITDA could be plausible by the end of the decade.

And on top of that, for the bull case, ChatGPT has become the cultural shorthand.

It is the hoover of vacuum cleaners, the Kleenex of tissues.

In that sense, people say, I'm using ChatGPT, or occasionally they say, I'm using Chat.

That brand is really, really important.