"Even Retail Investors Were Tapped" OpenAI Moves to Raise Capital and Improve Profitability Ahead of IPO, Putting AI Investment Frenzy to the Test

Mobilized even retail investors to secure $122 billion in funding
Accelerating profitability improvements ahead of IPO, with advertising and B2B as key pillars
IPO performance expected to shape investor sentiment, with warnings of a "bubble burst" if the debut falters

OpenAI, the developer of ChatGPT, has finalized plans for a massive capital raise. Ahead of its initial public offering (IPO), the company is pushing aggressively to improve profitability while also stepping up last-minute fundraising. In the market, a growing view holds that OpenAI’s eventual IPO performance will serve as a decisive gauge of investor sentiment toward artificial intelligence (AI). Should the IPO fail to gain traction, skepticism toward the AI industry could spread rapidly, raising the prospect of an AI bubble collapse becoming reality.

OpenAI’s Fundraising Drive

On March 31 local time, OpenAI said it had finalized the size of its recently closed funding round at $122 billion. That marks an increase of about $12 billion from the $110 billion fundraising total announced in late February. The round was led by Amazon, Nvidia and SoftBank, while the additional $12 billion was raised from a broader pool of participants including retail investors. It was the first time OpenAI had allowed individuals to participate in its investment round. Going forward, the company also plans to broaden indirect retail access through inclusion in exchange-traded funds (ETFs) managed by Cathie Wood’s ARK Invest.

Alongside the fundraising announcement, OpenAI said its monthly revenue has reached $2 billion. The company added that its revenue growth is running four times faster than that of rivals such as Google and Meta when they were at a comparable stage. It also stressed that ChatGPT’s weekly active users (WAU) exceed 900 million and that paid subscribers have surpassed 50 million. In addition, OpenAI said search usage has nearly tripled over the past year, while annual recurring revenue (ARR) from its pilot advertising operation has topped $100 million in just six weeks.

The company also highlighted momentum in its B2B (Business-to-Business) segment. OpenAI said more than 40% of its total revenue now comes from enterprise customers, and that weekly users of its flagship B2B coding tool, Codex, have increased fivefold over the past three months to more than 2 million. It also addressed its effort to build an AI super app integrating ChatGPT, Codex and a web browser, saying, "This is not merely product simplification, but a distribution strategy," and adding, "By integrating them, we can directly translate advances in model performance into user adoption and engagement."

Profitability Push Intensifies

Behind OpenAI’s aggressive fundraising and emphasis on revenue growth lies a major listing plan. According to foreign media reports last month, including Reuters, OpenAI is reorganizing its internal financial and investment structures with the aim of going public within the year. As competition for investment intensifies across the broader AI market, the company has effectively begun the IPO process in earnest to secure the capital needed for research and development and data center infrastructure expansion. Its target valuation reportedly stands at as much as $1 trillion, placing it among the world’s most highly valued technology companies.

OpenAI is also accelerating efforts to improve profitability ahead of the listing. One prominent example is the recruitment of David Dugan, a former Meta vice president in charge of advertising, to lead advertising solutions. Dugan is a veteran advertising executive with more than a decade of experience at Meta and has built close networks with major advertisers and agencies. OpenAI intends to use Dugan’s expertise to cultivate advertising as a core profit engine. Earlier, in early February, the company began inserting ads into chat windows for free ChatGPT users and subscribers to its low-cost "ChatGPT Go" plan, but ad exposure has so far remained limited and has yet to generate meaningful results.

The B2B business has also emerged as a central pillar of the company’s strategic overhaul. According to a March 21 report by the Financial Times, Fidji Simo, head of applications at OpenAI, told staff to "set aside secondary tasks and improve the Codex coding model," adding that they should "focus on winning enterprise customers and turning ChatGPT into a productivity tool." The FT also reported that "OpenAI plans to expand its workforce from the current 4,500 to about 8,000 by the end of 2026 in order to narrow the gap with Anthropic, while also stepping up hiring of specialized personnel dispatched to corporate clients to develop customized AI models." Through that process, OpenAI expects the B2B segment to account for more than 50% of total revenue by the end of this year.

In addition, OpenAI is discussing the establishment of joint ventures (JVs) with private equity firms to secure corporate clients. According to Reuters, OpenAI is considering a business model under which JVs would build customized AI models for companies owned by private equity firms, with the resulting profits shared between OpenAI and the funds. The company is said to have proposed terms including a minimum return of 17.5% and early access to AI models. By using such a structure, OpenAI could spread the engineering costs required to build tailored models, easing its pre-IPO cost burden while also boosting its enterprise business performance.

The AI Bubble at a Crossroads

In the market, OpenAI’s eventual listing is increasingly viewed as the pivotal event that will determine whether the AI bubble bursts. Major tech companies have recently been pouring enormous sums into the AI industry. Alphabet, Microsoft, Meta and Amazon have said they will collectively spend $660 billion on AI development over the next year. The problem is that a revenue model sufficient to justify that level of investment has yet to clearly emerge. Critics also argue that behind the overheated investment enthusiasm lie accounting and financial risks, including circular transactions between suppliers and buyers and the under-recognition of AI chip depreciation.

OpenAI itself remains in a deeply weak earnings position relative to the scale of investment it has attracted. In January, Sebastian Mallaby, a senior fellow at the Council on Foreign Relations, wrote in a New York Times opinion piece that "OpenAI will run out of money before it generates massive profits," adding, "Monetization becomes possible only when AI reaches the point of remembering and understanding everything about users, but the question is whether it can survive until then." The Information, a U.S. technology publication, also cited OpenAI internal estimates suggesting the company’s operating loss this year could reach $14 billion. That would represent nearly a threefold increase from the previous year. Over the same period, cash burn is also expected to widen to as much as $25 billion.

If OpenAI’s listing succeeds under these conditions, the market will have produced evidence that it places greater value on long-term growth potential and the possibility of securing a commanding position in AI infrastructure than on immediate losses. In that case, other big tech companies could also gain a measure of justification for their investment decisions. In other words, so-called "AI optimism" could regain momentum. If, on the other hand, OpenAI fails to generate strong IPO demand, the market is likely to apply a far stricter yardstick to the AI industry. That would raise the prospect of doubts over OpenAI’s valuation and business model spreading across the broader sector, intensifying fears of a bubble collapse.