The Metric

The Rule of 40 Score, calculated as Revenue Growth % + EBITDA Margin %, is a key metric for assessing the health of high-growth tech companies like OpenAI. It attempts to grapple with growth and profitability, where early stage growth companies often forgo profitability to keep the pedal on user Aquisition and expansion. In other words, how can we gauge whether the growth is justified? The rule of 40 score attempts to measure just that. In the context of OpenAI bubble discourse, a high Rule of 40 Score (e.g., OpenAI’s 180 in 2025) suggests robust growth potential, countering concerns of overvaluation by demonstrating strong fundamentals.

A higher score is better, meaning it’s getting more Revenue growth per EBITDA margin.

However, an excessively high score driven by growth alone may raise red flags about profitability, fueling bubble debates if cash burn is unsustainable. Interpreting OpenAI’s score requires comparing it to peers like early Amazon or Google, where high scores reflected market confidence, while scrutinizing whether growth justifies valuation amidst AI hype.

Verdict

As you can see, Openai is getting a healthy amount of growth for its revenue. This of course does not completely rule out whether openai is in a bubble, especially given its huge valuation.

Here’s the table used to calculate this figure: