00:00 Speaker A
We continue our look at OpenAI, named Yahoo Finance's 2025 Company of the Year.
00:03 Speaker A
This startup was included in almost every conversation about the AI industry in 2025. It's not even listed yet.
00:10 Speaker A
Gabelli Funds Portfolio Manager John Belton joins us to discuss what the next year holds for Open AI, the surrounding public-listed ecosystem, and the broader AI relationship.
00:19 Speaker A
John, thank you for being here. That's why we named OpenAI Company of the Year. Not surprisingly, as I mentioned earlier, this is at the heart of many discussions about AI.
00:29 Speaker A
Will next year unfold in a more positive direction or in a negative direction, given that some questions have been raised about the dependence of this deal on this company?
00:44 John Belton
right. Yeah. Well, thanks for hanging out with me, Julie. So OpenAI is clearly one of the biggest, if not the biggest, companies in the artificial intelligence space right now.
00:54 John Belton
A few things have become clear this year. First, the company's earnings trajectory is incredible. This is unprecedented. Based on the latest disclosures, I think the annual revenue run rate is in the low single digits of $1 billion to nearing $20 billion by the end of the year.
01:09 John Belton
The user base is currently approaching 900 million people every week. There's a lot of really exciting growth.
01:16 John Belton
I think the reason the market is a little nervous is the scale of the investment plan that this company has launched.
01:26 John Belton
They're talking about $1 trillion plus building infrastructure over the next few years. So really ambitious companies with really strong growth are really important to the whole ecosystem.
01:36 Speaker A
Um, John, you're invested in the AI thesis at this point, how do you think about doing that at this stage in the game? I mean, you know, there's a lot of discussion when people point out similarities to the dot-com bubble and, uh, other waves of innovation that we've seen in the past.
01:56 Speaker A
Often, even when the technology itself is viable and important, the winner that initially appears is not necessarily the winner in the end. So what do you think about such questions?
02:10 John Belton
Well, I think the evolution of this technology is still in its early stages. I think there are some really proven use cases for artificial intelligence so far. I think AI will be used in digital media, digital advertising, e-commerce businesses, cloud computing, and LLM chatbots. This is a completely new field that is already a fairly large industry.
02:39 John Belton
I think these are already pretty proven use cases.
02:42 John Belton
I think there's another collection of exciting use cases that we're starting to see commercialized, like autonomous driving, robotics, agent software.
02:54 John Belton
And then there's another group of like future use cases that are in pretty early stages of development.
03:06 John Belton
That is, the use of AI in life sciences, medical diagnostics, drug discovery, and more. So I think we're still in the very early stages of how this technology will work.
03:24 John Belton
Um, from that perspective, I think, um, like me, companies that are involved in building infrastructure are still in a decent place.
03:36 John Belton
We need to see some of these future use cases start to commercialize for underwriting and see strong and consistent revenue growth, but we're definitely very encouraged by what we've seen so far.
03:48 Speaker A
And as you know, there has been a lot of competition among the biggest LLMs. It's not just OpenAI, right? Gemini is coming soon. There's more Anthropic on the Enterprise side. As an investor, do you feel like you have to choose a side, so to speak, or are you going to invest in everything again?
04:09 John Belton
Well, when it comes to fundamental model businesses, it seems like four or five companies are starting to separate from the rest, at least in the United States. You mentioned Open AI and Gemini, and I think XAI and Anthropic as well. It could also become meta depending on what they announce in early 2026.
04:35 John Belton
Um, but I think there's a short-term focus in the market on the latest model releases and rankings and rankings in terms of model features. And I think it's going to be fluid for a while.
04:51 John Belton
I think certain models specialize in certain areas and are the best in certain areas, and other models are better at others. So, um, I don't think it's a great way to pick one foundational model company today.
05:10 John Belton
Um, but, you know, I feel like the top few companies are really starting to separate from the rest of the companies. Given that this is a highly capital-intensive business, it will likely become increasingly difficult for other companies to catch up with them.
05:24 Speaker A
John, thank you so much. appreciate.
