00:00 Speaker A
here at OpenAI CFO Sarah Friar.
00:03 Speaker A
Good to see you first and foremost. I I think you’re the most popular person at this conference besides me, Sarah.
00:07 Sarah Friar
Just you. You are it. Number one.
00:09 Speaker A
You have to be. Are people just following you around asking you questions about what OpenAI is doing next? I mean, so many investors in this room and it’s just so hard to keep up with the pace of development over at your company.
00:19 Sarah Friar
Yeah, I mean, it is a wild pace that we’re on. Um, you’re defining a whole new era, um, of AI.
00:26 Sarah Friar
What I kind of love is like the one thing a conference gives you is a chance to kind of compare and contrast. I think a year ago, a lot of people were still in this like, AI real? And I think here we are a year later, 700 million consumers using the product, 4 million enterprises using it, and I think the value is very real to people.
00:41 Speaker A
700 million? How fast is the platform growing?
00:43 Sarah Friar
So, revenue this year will grow over 3x. So about 13 billion in revenue from about 4 billion last year. So it’s it’s tripling on a very big base as well.
00:54 Speaker A
Wait a minute. So how much this year you’ll do what, 4 billion or that was last year?
00:57 Sarah Friar
Last year was four, this year about 13.
00:59 Speaker A
What is it like crunching the numbers for Open?
01:00 Sarah Friar
We use a lot of our own technology to do it. So that is the good news. We’re doing it in a very efficient way.
01:08 Speaker A
So it’s reinvented the finance department?
01:10 Sarah Friar
We are. That is, um, I kid you not, actually. We use custom GPTs for things like IR. We’re using it in our flux, which is a very finance term, but end of the month when you compare what happened to what was supposed to happen, we use a lot of agentic, um, software there. We’re using in areas like procurement, T&E, you name it, we’re kind of really trying to create the finance function of the future.
01:31 Speaker A
If I I’m going to put on my uh tech vest and pretend I’m an analyst at this Goldman conference. Um
01:37 Sarah Friar
Yeah, I want to see the Bro vest.
01:38 Speaker A
I hear yeah, yes. So here’s my question for you, wearing that uh very fancy vest. Where are we at in the investment cycle for AI?
01:47 Sarah Friar
I mean, we are I I might have to use a sports analogy, which is always scary as uh, you know, someone that didn’t grow up in this country, but like we’re in the first inning. Um, a lot of people have compared the AI era to things like the railway build out because it is a very capital intensive build out.
02:00 Sarah Friar
But I think we are just beginning. We’ve maybe laid some track from New York to Baltimore, but we’re ultimately going to blanket the US and ultimately blanket the world. And so, anyone who thinks this cycle is, you know, at a zenith is just, you know, is not seeing what I’m seeing, certainly, which is every day, every week, every month, we are very, very short of compute. It means we can’t launch features, we can’t train models, we can’t give um, compute to researchers that could have incredible breakthroughs in areas like health care and education and science. And so, I really am happy to see how much as a country we’re coming together to invest, but also just globally how much people are getting that message now.
02:37 Speaker A
Will we ever have enough compute?
02:38 Sarah Friar
I mean, I don’t know, never say ever. Um, I’m sure at some point, but in the same way, like could we ever have enough bandwidth for the internet? Like, could you answer that question today? Probably not. The internet’s two decades old. So I think it’s going to be a long time before we can say, yes, we’re done.
02:56 Speaker A
How does Stargate play in this?
02:57 Sarah Friar
So Stargate is our term for all of our compute fabric. Um, think of it as both how we work with um third parties, so folks like Microsoft or Core Weve or Oracle or Google even. Um, but think of it also as our plan for how we will build and design data centers on our own as well because we think that over the longer run, it will take both first party and third party in order to have enough compute, but also we are creating a lot of IP and I want to be able to keep that IP in house, monetize that IP, um and really kind of, you know, get the benefit of it. Think of it as kind of Amazon back in the day if they hadn’t created AWS, that would have been a whole like massive part of the story that didn’t ever manifest. And so at opening I want to make sure that as we build that full stack, we take advantage of what we’re learning, being on the frontier, being the biggest, um and learning how to build that well, build that more efficiently and then take advantage of it in our business model.
03:52 Speaker A
When you’re modeling out very various financial scenarios uh at OpenAI, is do you have the demand just it just goes up? I like when do things flatten out? Like when do you see that?
03:59 Sarah Friar
And are we on the planet when it when things flatten out?
04:00 Sarah Friar
I mean, when you’re at 700 million weeklys, you start you’re starting to talk about like if we looked at our monthlys, you’d be getting close to maybe 20ish percent of the internet population of the world on your platform, right? If you take out, you know, folks that are too young or maybe too old on the other side. But it’s only 20%. And we think that this is a technology where everyone benefits. Like you’re getting raw intelligence at your fingertips.
04:22 Sarah Friar
And so I would say we’re still getting started. And as we build out those models, what gets interesting, it’s not just about the user growth, which is tremendous, but it’s also about then what are all the areas where we could build products, build business models, and how do those interplay, right? Consumer hardware, great example, right? We just um bought the IO team, brought Johnny Ive and team into the fold. That could be a whole new business model for us, in the same way the iPhone was for the world of mobile.
04:54 Speaker A
So you’re not launching a phone. You want to share what he’s actually working on? Do you?
04:56 Sarah Friar
I I have to actually sit on my hands when I talk about it.
04:58 Speaker A
But but he is working on something and
05:00 Sarah Friar
I hope he’s working very hard on something right now.
05:02 Speaker A
Is that this year a launch for that or?
05:05 Sarah Friar
Uh, probably more next year. Hardware has a little bit of a longer gestation period, but we’re quite excited. I mean this this technology is multimodal. And I think about the prior era of internet really taught us to look at a screen. If anyone’s got kids out there, they know it’s hard to get them sometimes off that screen. When you start talking about being able to use voice or listen or use images or video, right, it becomes very, very intuitive and in some ways much more human, but I don’t think we yet have the form factor to serve that up.
05:39 Speaker A
If you and I are here uh one year from now having this conversation, I hope you are. Are you is OpenAI a public company?
05:46 Sarah Friar
Oh, that is a good question. I it comes back to like what do we need to do to build the business? So fundraising is absolutely central to our success.
05:51 Speaker A
keep up with your valuations anymore. I’ve lost track.
05:53 Sarah Friar
We’ve done a lot of fundraising in the past year. Um, to me, an IPO is just another form of a fund raise. So will we still be fundraising to keep funding compute. I suspect the answer to that is yes, but we’ll do it because we see a really strong ROI on the investment into the business with all of the the people we’re able to serve, going back to our mission, AGI for the benefit of humanity, but also in the the products that we’re able to create and then ultimately the ROI that we see on those over over a longer term.
06:19 Speaker A
Where would you put that uh being a public company in the priorities for OpenAI?
06:23 Sarah Friar
I will never put being a public company as a priority because I think it’s not a destination. It’s a milestone on a journey. In the same way I would never put a fund raise as like the outcome. Rather, it’s like thinking more broadly, what does it need to really accelerate this business? And so right now it’s we need money to invest in compute, money to invest in great researchers, um and we need to keep bringing customers along by showing them value, whether it’s enterprise customers, all the way through to small businesses, to consumers, um and doing it in a way where we’re at the forefront with our models, we’re doing it in a very safe way, um and that people feel like they’re getting to transform their lives.
07:12 Speaker A
What do you think about some of the last valuation I saw on OpenAI close to $500 billion. I mean these are very large numbers. Um, what do you think about some of these numbers?
07:18 Sarah Friar
Um, I mean, it goes back to where we started. We talked about the revenue. So if you’re going from 4 billion to 13, so you’re tripling at at these like real money, right? You’re not like at 100 million going to whatever 400 million. And these are like real leaps. Then I start to think about, well, what what would the market pay for that in terms of a multiple? Um, it doesn’t take that much to kind of project forward 13 billion into 2026 into 27. Remember, it’s a recurring revenue business. Um and then start to put software internet multiples on it. The types of valuations that you’re um reflecting back at me aren’t really that stretched.
07:54 Speaker A
Why not 1 trillion? I like, I mean, the growth rates might be there.
07:58 Sarah Friar
Well, I mean, if I come at it a different way, if you look at this era of computing, right? It spawned the first 4 trillion market cap companies, right? Nvidia, Microsoft and so on. We think the AI era is even bigger than all of that. So should it be spawning a, you know, a bigger than 4 trillion dollar market cap company or companies? Absolutely yes. I certainly hope we’re one of them because we are today on the forefront and I hope we don’t squander that lead. I hope we can continue to build on all of the mos that we’re putting into the business. And so absolutely, I think you’re going to be in trillions of dollars of market cap in this era.