The Trillion-Dollar Hallucination: OpenAI’s Valuation Defies Economic Gravity

*(Opinion: I’ve seen this movie before. We call it a bubble. When the valuation of a company enters the trillion-dollar stratosphere while its actual revenue drivers are being cannibalized by a price war, you aren't looking at a business plan—you're looking at a fantasy.)*

According to reporting from The Verge, OpenAI is now valued at $1.25 trillion in a new round of funding that has raised $11 billion. This follows a massive capital injection in March, where the company raised $122 billion at a valuation of $852 billion.

However, the climb to the top has been bumpy. TechCrunch reports that Bloomberg noted OpenAI had initially aimed for a $1.4 trillion valuation and hoped to secure up to $30 billion in funding. Those ambitions were curtailed by a dip in tech stocks and a shift in public sentiment regarding data center projects and AI companies following the midterms. While Bloomberg notes that OpenAI is still seeking additional investments that could push the total raise to $20 billion, the company has already been forced to scale back its goals.

While CEO Sam Altman has stated that OpenAI is prioritizing safety over a "guns blazing" approach to an IPO, the financial pressure is mounting. Altman has acknowledged that waiting too long to go public could be "bad for the world," though he has yet to provide a concrete timeline.

The disconnect between these trillion-dollar valuations and the actual market dynamics is becoming glaringly apparent. TechCrunch reports on new data from Ramp that indicates AI spending has effectively flatlined. While token volumes—the actual usage of the AI—continue to rise, the revenue is not following suit. Ramp data shows that token spend grew by only 1.5% across August and September, a staggering drop from the 42% growth seen in July.

Ara Kharazian, lead economist at Ramp, told TechCrunch that the "era of hypergrowth may be over." Kharazian notes that the vast majority of AI spending comes from venture-backed, high-growth tech firms. The top 1% of these "AI-pilled" firms have already seen their spending stutter, dipping just below the peak of $10,000 per employee. This is a critical failure point because the median firm is only spending between $12 and $15 per employee per month, and the top 10% are spending between $600 and $1,000. Kharazian argues it is unlikely that a car dealership or a doctor's office will ever reach the spending levels of the top 1%.

The reason for this revenue stagnation is a brutal price war. TechCrunch reports that OpenAI slashed API prices by half in September for GPT-6 Sol and GPT-6 Luna. Anthropic has responded with significant price reductions for Opus 5.5 and Fable 5.1; according to a recent filing, these cuts slashed Anthropic's revenue growth by approximately $600 million.

Both companies are utilizing enterprise discounts to lock in customers, but Kharazian warns this has created a buyer's market. Furthermore, competition is intensifying from Meta and Nvidia, who are offering cheaper or open-source models. Other competitors include open model firms from the U.S. and China, as well as a new company called Jev, which provides a lightweight tool for predetermined outputs that is becoming a top performer on Ramp.

Beyond the price war, customers are simply becoming more efficient. Kharazian explains that users are getting better at controlling AI, imposing budgets on employees, and routing tasks to cheaper, light models rather than expensive ones. Notion co-founder Akshay Kothari echoed these findings on X, stating, "tokens go brrr. costs go ahhh."

The market is already reacting to these cracks in the thesis. TechCrunch reports that Bloomberg estimated Anthropic’s valuation plummeted from $2 trillion in early October to between $1.2 trillion and $1.3 trillion. Additionally, credit agencies are expected to give Anthropic a high "junk" rating.

Investors are clinging to the hope that new use cases—similar to the emergence of AI coding—will spark a new wave of hypergrowth. But as the data shows, the current trajectory is one of diminishing returns. When you are subsidizing your own product to keep users while your valuation doubles in a matter of months, you aren't building a sustainable company; you're building a monument to investor optimism.