OpenAI just closed a massive $110 billion funding round led by Amazon ($50B), Nvidia ($30B), and SoftBank ($30B), pushing its valuation to around $730–840 billion (pre-money $730B, post-money ~$840B depending on the source).
It’s the largest private funding round ever, and yes, OpenAI is still deeply unprofitable with heavy cash burn—reports from last year projected losses like ~$8B in 2025, escalating sharply in later years (though exact future figures vary and have been revised upward in some leaks). Revenue was around $13B in 2025, so the valuation multiple is extremely high (60x+ revenue), far beyond typical tech bubbles like Snowflake’s peak.
The “vendor financing” angle has merit too—Amazon’s deal ties into massive AWS commitments from OpenAI (e.g., $100B+ over years), and Nvidia’s involves huge compute purchases. Part of Amazon’s $50B is staged, with $35B contingent on milestones like AGI achievement or an IPO (likely this year or soon), which adds risk and circularity.
Is it “borderline criminal”? That’s strong—no evidence of illegality; it’s aggressive, hype-driven late-cycle investing with big players betting on AI dominance despite the burn. Many see it as peak euphoria, similar to past bubbles, where infrastructure bets outrun near-term profits.
As an investor, the key takeaway is caution: the path to profitability is long and uncertain, reliant on breakthroughs and scale. Hype can drive valuations sky-high before reality (earnings) catches up. If you’re considering exposure (via public AI stocks or future OpenAI IPO), weigh the massive upside potential against the risk of a sharp correction if timelines slip. This isn’t a “safe” bet—it’s a moonshot.
