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The company has reportedly held early talks with investors about raising fresh capital at a staggering $1.2 trillion valuation—up from $852 billion in March. Why now? The launches of GPT-5.6 and Astra have reignited demand. OpenAI’s annualised revenue reportedly exceeded $40 billion, jumping 20% after GPT-5.6’s release. But extraordinary growth requires extraordinary capital. OpenAI spent around $34 billion last year, largely on computing infrastructure and model development. Another private round could provide the firepower needed to stay ahead of Anthropic, now valued at $965 billion and reportedly approaching profitability. It could also delay OpenAI’s IPO. Despite confidentially filing in June, Sam Altman recently suggested a listing is unlikely before 2027. The numbers are breathtaking: • $1.2 trillion potential valuation • $40+ billion annualised revenue • $34 billion annual spending The AI race is no longer just about models. It is becoming the largest capital race in corporate history. Source: FT
JPM estimates hyperscaler gross leverage at roughly 1.6x, around half that of the broader investment-grade universe. Leverage even fell quarter over quarter despite debt rising 92% YoY, while stronger cloud revenue and operating profits are beginning to provide evidence that AI investment is being monetized. The risk is therefore not that the strongest AI companies cannot borrow. It is that the scale of the buildout could require them to absorb a much larger share of available capital. JPM estimates roughly $5.5tn of AI and data-center investment from 2026 through 2030, with only around $1tn covered by organic cash generation. Approximately $2.1tn could come through high-grade bonds, with the remainder funded through equity, structured markets, leveraged finance and alternative capital. AI is increasingly a capital-markets story, not just a technology story. Source: JPM
Below are his reasonings: 1. LLMs are not AI and won't be AGI. There is nothing AI to slow down. 2. Competition is coming up fast, slowing benefits incumbents. 3. IPOs need hype & puffery; "we are so awesome it could become dangerous" is hype & puffery 4. Cover for real uncontrollable slowing growth as IPOs look to be pushed out Source: Michael Burry Stock Tracker