Investing in OpenAI Before Its IPO Means Betting on Cathie Wood’s ETFs — and a 35.5 Price-to-Sales Ratio

Retail investors can’t buy OpenAI directly, but they can already place a bet on its future — through three ETFs managed by Cathie Wood’s Ark Investment Management. The firm invested $240 million in OpenAI in March, spreading the position across the Ark Innovation ETF (ARKK), Ark Next Generation Internet ETF (ARKW), and Ark Blockchain and Fintech Innovation ETF (ARKF). In each, OpenAI represents just under 3% of the portfolio. That gives everyday investors a backdoor way to own a piece of the ChatGPT maker before its expected IPO by 2026.

OpenAI is valued at $852 billion, a figure reached in a recent private funding round. It generates $24 billion in annualized revenue, primarily through paid subscriptions to ChatGPT and enterprise access to its AI models. That puts its price-to-sales (P/S) ratio at 35.5 — nearly double the 19.8 P/S ratio of Nvidia, the closest public proxy for AI infrastructure growth.

The premium is steep, especially given OpenAI’s path to profitability remains unclear. The company is still losing money and faces enormous capital demands. It plans to spend $300 billion renting computing capacity from Oracle and another $281 billion with Microsoft Azure. It does not currently have the revenue to fund those commitments. That leaves two options: explosive revenue growth or further equity raises that dilute existing shareholders.

Meanwhile, competition is intensifying. Anthropic, maker of the Claude chatbot, has reportedly surpassed OpenAI with $30 billion in annualized revenue. Alphabet’s Gemini models are gaining traction, backed by proprietary data centers and custom AI chips — infrastructure advantages OpenAI lacks.

Retail investors seeking pre-IPO exposure to OpenAI must accept elevated valuation, concentrated technology risk, and indirect ownership through actively managed ETFs with fees and performance volatility.