OpenAI Valuation: What Tech Founders Need to Know About SaaS Multiples

December 10, 2025

By: Matthew Barbieri

Partner, Advisory

Key Takeaways

OpenAI’s $500 billion valuation represents 167x projected 2025 revenue: Traditional SaaS multiples average 5-10x ARR for mature companies
Secondary market pricing suggests $750 billion implied value: SoftBank’s stake creates a public market proxy that tech founders can track
Cash burn projections hit $47 billion by 2028: Revenue growth must justify unprecedented valuation multiples or IPO timelines accelerate
Bottom Line: OpenAI’s valuation defies traditional SaaS metrics

If you’re a tech founder watching OpenAI’s valuation trajectory, you’re probably asking the same question investors are: how does a company burning billions annually command a $500 billion price tag—and what does that mean for the rest of us building in this space?

OpenAI closed a secondary share sale at a $500 billion valuation in October 2025, according to CNBC reporting. That figure represents a 67% jump from the $300 billion valuation earlier in the year. For context, SpaceX—currently valued at $456 billion according to Reuters—previously held the title of world’s most valuable private company.

Here’s what makes this interesting: traditional SaaS valuation multiples don’t come close to explaining these numbers.

The Math Behind OpenAI Valuation

Standard SaaS companies trade at 5-10x annual recurring revenue for mature businesses, with high-growth companies occasionally reaching 15-20x multiples. OpenAI’s projected 2025 revenue sits around $3 billion, based on various industry reports. At a $500 billion valuation, that’s roughly 167x revenue.

That multiple doesn’t exist in conventional SaaS benchmarking.

The Information reported that OpenAI’s annual cash burn is projected to rise from $17 billion in 2026 to $35 billion in 2027, peaking at $47 billion in 2028. These figures suggest the company needs between $50 billion and $80 billion in fresh capital—sums that become challenging to raise in private markets without significant revenue growth.

Reuters reported in late October 2025 that OpenAI is considering filing for an IPO as early as the second half of 2026, though CFO Sarah Friar has suggested 2027 as more realistic. The company hasn’t issued direct statements confirming IPO plans, but sources familiar with the matter indicate preparations are underway.

What SoftBank’s Stake Reveals

SoftBank’s 11% position in OpenAI creates an unusual opportunity to estimate public market sentiment toward the private company. Reuters Breakingviews analysis from November 2025 suggests that after accounting for SoftBank’s other holdings and applying a 30% holding company discount, the market implies OpenAI is worth approximately $750 billion—50% above its most recent private valuation.

SoftBank invested $10.8 billion for that 11% stake, with commitments to invest another $22.5 billion, according to the Breakingviews analysis. The Japanese tech investor initially entered at a $300 billion valuation in April 2025, then acquired additional shares from employees at $500 billion.

PM Insights reported that secondary market investors were exchanging OpenAI shares at valuations of approximately $600 billion as of November 12, 2025. These secondary market prices provide another data point suggesting strong investor appetite above the official $500 billion mark.

The xAI Comparison

Benzinga reported in November 2025 that Elon Musk’s xAI is in advanced talks to raise $15 billion at a $230 billion valuation. That’s roughly half of OpenAI’s valuation, despite xAI having significantly less market presence, fewer customers, and a less developed commercial footprint.

The comparison highlights how AI infrastructure investments are being priced on potential rather than current metrics. Grok remains an emerging challenger while ChatGPT has become the default consumer AI interface. OpenAI has established business deals, multimodal adoption, and a developer ecosystem that xAI is still building.

Investors appear to be pricing xAI based on Musk’s track record and infrastructure scale, betting that massive compute investments today will generate returns tomorrow. Whether that bet proves correct depends on execution against an entrenched leader.

What This Means for Tech Founders

OpenAI’s valuation creates both opportunity and pressure for founders in adjacent spaces:

Investor appetite for AI remains strong despite valuations that defy traditional metrics. If you’re building AI-enabled products or infrastructure, capital is available—but expectations for growth and market capture have escalated accordingly.

Revenue multiples matter less than strategic positioning in nascent markets. OpenAI’s valuation reflects its position as the category leader in generative AI, not its current revenue generation. Founders competing in established SaaS categories can’t expect similar treatment.

Cash burn tolerance has limits even in hot markets. OpenAI’s projected burn rate suggests an IPO timeline driven by capital needs rather than choice. If your burn rate exceeds revenue growth significantly, market conditions can force your hand on timing.

Secondary market valuations signal investor sentiment more reliably than primary funding rounds. The gap between OpenAI’s official $500 billion valuation and the $600-750 billion implied valuations suggests strong demand. Founders should track secondary market activity in their own funding rounds.

The Infrastructure vs. Proof Tension

OpenAI commands its premium through evidence—adoption metrics, partnership announcements, subscription revenue, and ecosystem effects that compound with every release. The company has receipts showing market acceptance.

xAI’s valuation reflects a different bet: build massive infrastructure early and hope the model catches up. That’s the classic Silicon Valley tension between “build huge and hope” versus “prove it then scale.”

For founders, the lesson is clear: your valuation multiple depends heavily on which story you’re telling. Infrastructure plays require patient capital and tolerance for extended burn periods. Proof-based approaches demand demonstrable traction before commanding premium valuations.

Financial Reporting Implications

As OpenAI transitions from its capped-profit model to a conventional corporate structure that can raise outside capital more easily, financial reporting requirements will intensify. An IPO brings GAAP compliance, quarterly earnings pressure, and public scrutiny of metrics that private companies can keep internal.

For tech founders considering similar transitions, understanding how AI development costs are capitalized under ASC 350-40 becomes critical. The September 2025 guidance update under ASU 2025-06 provides clearer frameworks for internal-use software and AI projects, but requires management judgment about when capitalization begins.

The accounting treatment—capitalizing versus expensing AI development costs—directly affects reported earnings, balance sheet strength, and investor perceptions of capital allocation decisions. These choices matter more at scale.

Why Traditional Multiples Don’t Apply

OpenAI’s valuation reflects several factors that traditional SaaS multiples don’t capture:

Network effects and ecosystem lock-in create switching costs that compound over time. Once developers build on OpenAI’s APIs, migration becomes increasingly expensive.

Strategic value to existing tech giants exceeds pure financial returns. Microsoft’s 27% stake (valued at roughly $135 billion, according to Business Insider’s October 2025 reporting) gives the company access to leading AI capabilities without building from scratch.

First-mover advantage in a transformational technology category commands premium valuations regardless of current profitability. The market is pricing OpenAI’s position as the category definer, not just its revenue.

Potential for winner-take-most dynamics in AI infrastructure justifies aggressive valuations for leaders. If OpenAI maintains its position as models and applications proliferate, revenue growth could eventually justify current multiples.

The Timing Question

Reuters reported that OpenAI’s own projections suggest urgency around funding timelines. Raising $50-80 billion in private capital becomes increasingly difficult at already elevated valuations. An IPO provides access to deeper capital pools and liquidity for early investors and employees.

The secondary share sale in October 2025 totaled $6.6 billion, falling short of the $10.3 billion authorized according to CNBC. Lower participation is reportedly being viewed internally as employee confidence in long-term prospects. However, it also suggests liquidity needs aren’t urgent enough to force maximum participation.

For tech founders, OpenAI’s timeline illustrates how capital intensity drives strategic decisions even for market leaders. Your burn rate, revenue growth trajectory, and funding environment collectively determine when you need to consider public markets—regardless of your preference.

What Founders Should Watch

Track these indicators to understand whether OpenAI’s valuation holds or corrects:

Revenue growth announcements from OpenAI will either justify current multiples or expose them as unsustainable. If 2026 revenue doesn’t show significant acceleration, pressure on valuation increases.

SoftBank’s stock price movements provide a public market proxy for OpenAI sentiment. Significant declines in SoftBank shares after accounting for other holdings would signal cooling enthusiasm.

Secondary market pricing trends offer real-time valuation signals between funding rounds. If secondary buyers start demanding discounts to the $500 billion mark, that’s an early warning indicator.

IPO timing decisions and initial pricing will reveal whether public market investors share private market enthusiasm. A delayed IPO or pricing below recent private valuations would represent a significant shift.

Building a tech company that needs strategic financial guidance as you scale? Wiss works with SaaS and tech founders from seed through Series B to implement accounting systems, plan for funding rounds, and prepare for the financial complexity that comes with growth. Connect with our tech advisory team to discuss your specific needs.

Disclaimer

The information in this article is current as of the publication date. Valuations, financial projections, and market conditions referenced are based on publicly reported information from sources including CNBC, Reuters, Bloomberg, The Information, and Benzinga. These figures are subject to change and should not be considered investment advice. Readers should consult with financial advisors and conduct independent research before making investment or business decisions.

Sources: