WHY OPENAI’S HYPE IS FADING FAST

OPEN AI HAS INVESTORS UNCOMFORTABLE

Look at the chart..

OpenAI’s private valuation has soared and crashed. This isn’t just about hype cycles—it’s about structure.

THE PROBLEM: MISSION VS. MONEY

OpenAI didn’t start like a normal startup.

It began as a nonprofit, dedicated to making AI safe for humanity. To fund development, it created a capped-profit subsidiary in 2019.

Investors could make money—but only up to a limit. The nonprofit board stayed in control, putting mission over profit.

That kept valuations modest.

THE PBC DREAM

In 2024, OpenAI proposed converting its for-profit arm into a Public Benefit Corporation (PBC).

Unlike the capped-profit model, a PBC has no hard limit on returns. Investors got excited. Valuations surged.

SoftBank’s 2025 round valued OpenAI near $300 billion, betting on a looser, profit-friendly structure.

THE REALITY CHECK

But OpenAI’s nonprofit didn’t give up control.

In May 2025, it pledged to permanently control the PBC’s board.

Translation? Even as a PBC, OpenAI will put mission over maximizing profit. Investors can’t force it to squeeze every dollar from AGI. They can’t guarantee a big IPO payday.

THE RESULT: VALUATION CRASH

That nonprofit pledge killed the hype.

By July 2025, secondary-market pricing slumped to around $140 billion—less than half of the SoftBank peak.

The market realized OpenAI wasn’t going to behave like a typical tech giant chasing profit at all costs.

THE CORE ISSUE

“The stronger the nonprofit control, the safer for humanity—but the worse for profit.”

That fundamental tension isn’t going away.

Until investors believe they can actually extract value without losing control, don’t expect valuations to return to their hype-driven peaks.

✅ Realistic Range Going Forward

Investors see $150–200 B as plausible under nonprofit control.

Higher valuations (> $250 B) would require either: Structural governance change (unlikely now), or massively increased revenue while still under mission constraints (harder).