In February, OpenAI completed a record-breaking $110 billion funding round, pushing its valuation to $840 billion — surpassing JPMorgan and SpaceX to become one of the most valuable private companies in the world. Just six months later, the failure to meet two key targets has brought a critical question into focus: can OpenAI still execute a successful IPO?

Missed Targets on Both Revenue and Users

Earlier this year, CFO Sarah Friar announced that OpenAI’s annual recurring revenue (ARR) had surpassed $20 billion, more than tripling from $6 billion in 2024. However, ARR reflects projected revenue under current conditions, not actual income.

According to subsequent investor disclosures, OpenAI’s actual recognized revenue for 2025 was approximately $13.1 billion. The gap between ARR and realized revenue highlights a growing issue — growth slowed significantly in the second half of the year.

Revenue failed to keep pace with ARR expansion, suggesting weaker conversion rates or slower customer acquisition in the final quarter. For a company heading toward an IPO, a flattening growth curve is more concerning than ongoing losses.

On the user side, OpenAI had set a goal of reaching 1 billion weekly active users after hitting 350 million earlier in the year. By December 2025, weekly active users approached 900 million — close, but ultimately falling short. As of February 2026, the figure has just crossed 900 million, confirming that the 1 billion target was missed.

While 900 million weekly users places ChatGPT among the top global platforms, the issue lies in decelerating growth. Monthly user growth dropped sharply from 42% earlier in the year to just 13% by September. Mobile downloads declined more than 8% month-over-month in October, while average daily usage time fell by 22.5% compared to July, and daily active sessions dropped 21%.

User growth continues, but momentum is fading — a critical concern for a loss-making company whose valuation depends heavily on its growth narrative.

The “Growth Trap” Facing OpenAI

Challenge One: Subscription Limits vs. Cost Structure

ChatGPT’s monetization remains weak. A Deutsche Bank report from October 2025 estimated that only about 5% of its 800 million weekly users were paying subscribers.

Even more concerning, OpenAI reportedly spends approximately $2.25 for every $1 of revenue generated. In 2025, the company recorded $13.1 billion in revenue but posted losses of around $8 billion. CEO Sam Altman has acknowledged that even the $200-per-month Pro subscription remains unprofitable.

Unlike traditional SaaS models, where marginal costs approach zero, AI services incur real and rising costs for each additional user — especially free users.

Challenge Two: Consumer Use Cases vs. Infrastructure Investment

A joint study by OpenAI, Harvard, and Duke revealed that over 70% of ChatGPT usage is unrelated to work, with coding requests accounting for just 4.2%.

Most users rely on ChatGPT for everyday tasks — asking for movie recommendations, recipes, or note-taking assistance — rather than advanced problem-solving. Meanwhile, OpenAI’s development efforts have focused heavily on high-end reasoning models, such as those capable of achieving gold-medal-level performance in the International Mathematical Olympiad.

This mismatch between product development and user demand is a fundamental reason why the company failed to reach its 1 billion user target.

Challenge Three: Intensifying Competition

ChatGPT’s global market share has declined from 87.2% at the beginning of 2025 to 68%, while Google’s Gemini has surged from 5.4% to 18.2%.

Google benefits from its integrated ecosystem — search, browser distribution, and advertising monetization — advantages OpenAI lacks.

A more immediate threat comes from Anthropic. By March 2026, Anthropic’s annualized revenue had surpassed $19 billion. Its Claude Code product has generated over $2.5 billion in annualized revenue, and secondary market valuations have at times exceeded OpenAI’s.

OpenAI is reportedly targeting an IPO as early as Q4 2026 or no later than 2027, with a potential valuation of up to $1 trillion. However, missing its key growth targets could directly impact IPO pricing.

According to Polymarket data, the probability of OpenAI completing an IPO this year is currently estimated at just 51.5%.

OpenAI is not standing still. Management is exploring multiple avenues to address these challenges.

Advertising experiments have quietly begun within ChatGPT, while Fidji Simo — formerly of Meta — has been brought in as CEO of applications to lead monetization efforts.

The company is also expanding into hardware. Analyst Ming-Chi Kuo has indicated that OpenAI is working with MediaTek and Qualcomm to develop mobile processors, with mass production targeted for 2028.

Enterprise revenue now accounts for over 40% of total income, with more than 1 million companies paying for its services. ChatGPT has also reached 7 million paid enterprise seats, making it one of the fastest-growing enterprise platforms in history.