Gerstner estimates TikTok US generates $8-10 billion in revenue but operates at a loss.
“I think I've seen other numbers out there that they're doing somewhere between 8 and 10,000,000,000 in TikTok US revenue and that they're losing money on TikTok US.”
Gerstner explains that ARR (annual recurring revenue) gets high multiples because it's predictable like cable subscriptions.
“ARR stands for annual recurring revenue. And recurring revenue, like a monopoly cable subscription, gets a really high multiple. That's why softwares have gotten high multiples. They're very predictable.”
Gerstner estimates OpenAI's consumer business represents $2.1 billion of roughly $3-4 billion total revenue.
“It would imply that there are about 2.1 of the three four is the consumer business”
Gerstner calculates OpenAI's rumored $150 billion valuation represents 15 times forward revenue of roughly $10 billion.
“If that trajectory were to continue, right, that'd give you like roughly $10,000,000,000 next year. And the round's rumored to be at $150,000,000,000 so that's about 15 times forward revenue.”
Gerstner says OpenAI will do $5B revenue this year, $10B next, twice Google's IPO revenue.
“Reports are that they'll do 5,000,000,000 ish of revenue or run rate revenue this year, maybe going to 10,000,000,000 next year.”
Gerstner says NVIDIA will do 125 billion revenue this year versus prior billion dollar ceiling.
“Give or take you'll do a 125,000,000,000 in revenue this year. You know there was at one point somebody told you the company would never be worth more than a billion.”
Gerstner notes NVIDIA's 2023 revenue was $60B versus analyst forecasts of $26B in January 2023.
“The forecast for Nvidia at that dinner in January 2023 was that you would do 26,000,000,000 of revenue for the year 2023. You did 60,000,000,000, right?”
Gerstner calculates that historical revenue growth rates produce $450B to $700B surpluses by 2029 with spending cuts.
“If you do that and simply reduce the size of government back to trend line, you end up with a 700,000,000,000 surplus.”
Gerstner argues GPU capex sustainability depends on hyperscalers generating commensurate inference revenues, citing Satya's disciplined approach.
“It all comes down ultimately to the revenues that are generated by the people who are making the purchases of the GPUs. Right?”
Gerstner posits 30% annual infrastructure expense growth requires matching inference revenue growth from enterprises and consumers.
“if you think that infrastructure expenses are going to grow at 30% a year, then I think you have to believe that the underlying inference revenues, right, both on the consumer side and the enterprise side are gonna grow somewhere in that range as well.”
Gerstner argues capex growth depends on enterprise adoption rates and consumer willingness to pay, not just model improvements.
“It's the rate of adoption of consumers and what consumers are willing to pay to use ChatGPT or to use Clawd or to use these other services.”
Gerstner says tariffs aim for $500 billion versus current $50 billion, a 10x increase targeting China, Canada, and Mexico.
“The president is targeting 500,000,000,000, so a 10x increase in tariff revenue. Right? He just announced today, again, China, Canada, Mexico.”
Gerstner reports OpenAI will exceed $11 billion in revenue this year per recent CNBC disclosure.
“OpenAI, you could see the pacing from the launch of their first consumer product relative to Google and Meta. Sarah just talked on CNBC last week, this year will be over $11,000,000,000”
“OpenAI, you could see the pacing from the launch of their first consumer product relative to Google and Meta.”
Gerstner states OpenAI is four times the size Google was at IPO in revenue and searches.
“OpenAI today is four times the size that Google was when it went public in terms of revenue, in terms of searches.”
Gerstner suggests OpenAI at $100 billion revenue could become the most valuable company in the world.
“What's your level of confidence that you guys will reach a 100,000,000,000 of revenue in the future and kind of be that you know AI defining company because at a 100,000,000,000 in revenue it seems to me that this company could be on a path to being the most valuable company in the world,”
Gerstner calculates OpenAI needs at least $150 billion revenue in 2030 to justify announced CapEx commitments.
“And so, like, the question is, Bill, how much revenue do they need in 2030 to justify $150,000,000,000 in capex? Well, I think you would need at least $150,000,000,000 of revenue.”
Gerstner contrasts OpenAI's $13 billion revenue with its $1.4 trillion compute commitment over four to five years.
“OpenAI's revenues are still a reported $13,000,000,000 in 2025. And Sam, on your live stream this week, you talked about this massive commitment to compute, right? 1,400,000,000,000 over the next four or five years”
Gerstner argues $100-200B annual capex is responsible if OpenAI hits $100-200B revenue in 2028-29.
“Now if they're doing a 100 to 200,000,000,000 in revenue in 2829, then now we're in the zone of responsible.”
Gerstner clarifies Sam Altman expects OpenAI to exceed $100 billion revenue in 2027 or 2028.
“What Sam said multiple times on the pod and since is that he expects that they'll do over 100,000,000,000 in revenues in twenty seven or twenty eight.”
Gerstner notes Altman tweeted OpenAI will exit the year at $20 billion in revenue.
“And he just said in his tweet that they're gonna exit the year at $20,000,000,000 in revenue.”
Gerstner reports Altman expects OpenAI to exceed $100 billion in revenue in 2027 or 2028.
“What Sam said multiple times on the pod and since is that he expects that they'll do over 100,000,000,000 in revenues in twenty seven or '28.”
Gerstner reports Altman disclosed OpenAI is doing more than $13 billion in revenue.
“Sam came on the podcast. He was a little bit feisty. And he said, listen. We're doing more than 13,000,000,000 in revenue.”
Gerstner notes NVIDIA added almost $200 billion of revenue in the last three years.
“You know, you've seen NVIDIA add almost $200,000,000,000 of revenue in the last three years. Yeah. Truly extraordinary.”
Gerstner says NVIDIA indicated a $100 billion run rate expected by end of next year.
“And they just told us that we should expect a run rate by the end of next year of a $100,000,000,000.”
Gerstner argues AI must generate $1 trillion revenue to justify current CapEx versus $400 billion for all software.
“then you've gotta earn about a trillion dollars of AI revenue for all of this CapEx to be worth it.”
Gerstner reports OpenAI added one billion dollars in API revenue in the last thirty days.
“OpenAI just announced last in the last few days that they've added $1,000,000,000 of API revenue in the last thirty days.”
Gerstner says SpaceX moved to $27 billion AI hyperscaler revenue in six weeks with Anthropic and Google deals.
“In literally six weeks, they went from not in the game to $27,000,000,000 of AI hyperscaler revenue with big deals Google? With big deals from Anthropic and Google.”
Gerstner says Cursor could reach $10 billion in revenue this year on its own.
“We thought this company could get to 10,000,000,000 in revenue on its own this year.”
Gerstner predicts a robust back half if OpenAI hits $100 billion exit revenue and IPOs this year.
“If that revenue is on track, right, if they're headed to a $100,000,000,000 of exit revenue, you know, this year and and and have an IPO in the back half, I think you could see a really robust, you know, back half of the year.”
Gerstner says frontier labs still capture roughly 90% of AI economics despite open source token share gains
“@Jason Agree. Grt competition! Share of tokens increasing at open source models (tho both still early in growth curve & growing rapidly). But share of wallet / AI economics continues to be ~ 90% to closed / frontier labs despite dire forecasts. The question is if / when changes. 🧐💰”
Gerstner reports Starlink has twelve million subscribers growing twenty percent quarterly at sixty-six dollars monthly revenue.
“ Inside the segment results, the hosts found a business that barely needs AI to justify its value. Starlink now has 12 million subscribers, doubled year over year, growing 20% quarter over quarter at a $66 monthly ARPU, generating $4.3 billion of revenue and $2.6 billion of adjusted EBIT in the quarter. Friedberg walked through the standalone math: at this trajectory, Starlink alone could reach roughly $40 billion of revenue and $30 billion of free cash flow within a year; at a 30x multiple for a high-renewal subscription business, that is a trillion-dollar market cap on its own within 18 months — with everything else (Starship, the AI data centers, the terafab semiconductor project) as ”
Gerstner says Anthropic and OpenAI revenue scaling is 10x faster than Google and Meta at comparable scale
“@patrick_oshag Yes! Size of TAM only explanation for Anthropic & OAI revenue scaling - we have never seen anything like it. 10x faster than Google & Meta at comparable scale. 🎯”
Gerstner praises Databricks for stacking S-curves and defining markets over a decade as a shareholder
“@alighodsi Truly legendary. I have watched Ali & team brilliantly stack S curves for a decade. Nobody could touch their execution. Their growth & success was not a single product. They didn’t wait for markets - they took risks & defined markets. We are grateful shareholders. 📈🫡”