OpenAI is on a “vibe spending” binge that could try investors’ patience, JPMorgan analysts said on Monday as they launched coverage of the private artificial intelligence firm with a cautiously optimistic outlook.
In its first-ever research report on a private company, JPMorgan said OpenAI's eye-popping growth—reaching $10 billion in annual recurring revenue, up 82% year-over-year—was “remarkable,” but warned that profitability is unlikely before 2029.
“Investor expectations may be tested,” analysts wrote, citing rising costs, intensifying competition, and model commoditization.
JPMorgan noted the company has raised $63 billion for infrastructure and talent while trading at 27 times its 2025 estimated revenue, which is well above the tech sector average.
OpenAI, valued at $300 billion following a March funding round, has captured 18% of all AI capital raised since 2023 and dominates with a 70% share of AI app downloads. Its flagship chatbot ChatGPT now has more than 800 million users and contributes to the $7 billion in consumer revenue that makes up the majority of the company’s total sales.
Still, the analysts flagged challenges ahead, including declining pricing power for its GPT models. GPT-4, once a market leader, now ranks 95th on the LM Arena benchmark, trailing new entrants like Google’s Gemini 2.5 and DeepSeek-R1 from China.
JPMorgan projects OpenAI could reach $174 billion in revenue by 2030, but with no path to profitability in the near term, the company’s rapid expansion may continue to fuel both enthusiasm and unease among investors.