OpenAI's Dots Are Here!

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Travis Hoium, Rachel Warren, and Lou Whiteman discuss:

• Dots are here!
• Should Muse worry?
• Anthropic's prospectus leak.
• What we're looking for in the S-1.
• Aura's IPO delay.
• A closing window.

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A full transcript is below.

This podcast was recorded on Sept. 30, 2026.

Travis Hoium: The Dots are here, and Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool and Gems Investing. I'm Travis Hoium. I'm joined today by Rachel Warren and Lou Whiteman. Guys, Meta's Muse had the market's attention for nearly a month. But that's long enough in the world of artificial intelligence. Dots are here. This is a Muse-like product from OpenAI. Can operate within ChatGPT. Rachel, they're all bringing out these interesting characters. They want us to be using agents all the time and interacting on an ongoing basis with Muse, with Dots. What do you think about OpenAI's play into this world?

Rachel Warren: I think this is the continued push for durable monetization for OpenAI. There's been a lot of experimentation to see what works. I think this is the next iteration of that. Dots, there's a $ 200-a-month plan. There's also a $ 500-a-month tier for the really heavy corporate users. This is not for a casual consumer use case. This is very much for digital power users, really, you know, highly technical professionals, thinking data analysts that might be running massive sets across systems, software engineers running continuous background code tests. There are applications here. This isn't a chatbot. It's really an advanced workflow infrastructure layer.

What's interesting, though, as I was reading that OpenAI is already cutting compute limits on the $200 tier because running the background agents is obviously wildly expensive. That could be a bit of an issue in terms of execution. As you noted, with Meta's views, it held the spotlight for a few weeks. Then OpenAI has jumped in with dots. I think one of the big takeaways for me here is we're seeing that, at least algorithmically speaking, moats don't exist right now. The moment one of these companies invents a new feature, a competitor clones or improves it within weeks. No one is sitting on a lead in terms of those types of products.

Travis Hoium: Lou, that seems to be a big piece here is that whatever somebody creates, no matter how awesome it is, somebody can just copy it, and it only takes about 30 days.

Lou Whiteman: Weren't we just talking about this two weeks ago when we were talking about why we shouldn't be too excited about Meta on this? Yeah, sure enough. Look, congratulations on the modernization strategy at $200 a month. All they need is what? About 200 million users annually to pay for their compute spend. I don't know what they're doing here. It feels like maybe they were annoyed with Meta's valuation because it doesn't feel like that there is a real chance for monetization here. There's no chance normals are going to say, let me sign up to pay $200 a month to find out if this is any good. That's just not going to happen. I guess you could give it away for free and hope people get addicted.

But again, they have use down the street, and with the compute costs, I don't know if that's a good idea. This is neat, this is fun, this is still not answering any of the questions that we have about this company. It's a great proof of concept, but if it's not a revenue producer, OpenAI still got big questions. If this is an add-on to a $200 subscription plan? I've still got big questions. I don't know what problem they're solving here other than saying, Look what we can do.

Travis Hoium: Lou, I wanted to touch on that because that seems like the interesting thing with all of these products, and we keep coming back to this over and over again. This is amazing. I think it's great that we can do all of these things. I've found great use cases in Muse. They're not massive use cases, but just small improvements to my life, and yet I'm not going to pay for them. It's great that Muse is free. Is this the fundamental problem with these companies is people are getting some use out of it, but when you say, Hey, you got a pony up even $20 a month, most people aren't paying that.

Lou Whiteman: I want to be careful with my words here because we're early days, and there's plenty of paths that we can take to get there. But we've said it before, not with OpenAI and Anthropic because they don't have a history, but all of these companies basically from the valley. These guys are used to double digit return on invested capital numbers. If you look at the amount of capital that they are spending on this, there's massive amounts of revenue. There was one, was it Apple? Who said, we need a couple trillion in revenue in the years to come to justify all of what's going on here, and I still don't see how these things are going to get there if they're commoditized. Now, that we just have two. Wait, Gemini hasn't entered the chat yet. They might, but now that we have two, how does anyone have pricing power here? Just the same basic questions. Again, I'm not going to sit here and say they can't answer them. I'm not going to be that Luddite. But as far as investible, there is nothing about this that changes versus two months ago what we would think about these companies. This is a neat feature that shows the potential of the technology, but it still doesn't feel like a business plan.

Travis Hoium: Rachel, do you think any of these products have people moving to a different service? I think that we've learned that the big players in the industry are going to remain the big players in the industry. Instinct has come out, but I don't know, it seems like they're already past their peak. But as we look at Meta's products now, OpenAI's products, Lou mentioned it, Gemini is probably going to come out with something. I would be shocked if Apple doesn't integrate these features into the iPhone that I have sitting in my pocket all the time. Do you think that anyone is actually going to move to a different platform, move their data, move the way that they're interacting? Or is this all just entrenching the incumbents even further?

Rachel Warren: I think it could risk just entrenching the incumbents even further. Like I said earlier, I think OpenAI is really looking for a monetization strategy that sticks, and I don't think they found it. It doesn't mean they won't. But that's part of the problem. You could easily see Microsoft, Alphabet's Google, Apple could build these tools into an operating system for free. OpenAI's achieved advantage is the brand momentum. That early user data. There's a real consumer edge there in the sense that that's where a lot of your average users who first got introduced to Generative AI went. But if Meta is giving away a similar product for free, really to protect its Ad model, opening eyes paywall, it looks flimsy. The real lasting moat is probably going to be those who weave these agents deepest into the enterprise systems. But I think we are seeing a time where that flat monthly subscription doesn't make sense long term if you have a power user's continuous usage costs. The company way more than they pay in fees. Could we see a model that pivots to a consumption-based utility model? That could be really interesting to think about. I don't think that this is going to be the end-all, be-all for OpenAI. I think it's the experimentation phase. I think we should expect to see more of that. That's good. But this is not going to be the solution to their cash burn and profitability problems.

Lou Whiteman: The issue is, at the end of the day, it's neat when something auto-fills your calendar, but you're really going to pay to not have the type of things. But here's the other argument, the argument against RH. I don't know if I believe this, but I think if we're wrong, this is why we're wrong. Silicon Valley right now is in a rut. It is a shell of its former self. It's an echo chamber. Right now we are all just copying each other and doing the same things. We need a Steve Jobs. We need someone to just say, Hey, no, this is different. I think at some point, there's a good possibility that somebody will emerge with just a different idea, and that may be the path towards monetization, towards riches. I'm not that guy. I don't know what that is, and I'm not sure it's going to come, but it feels like that if this moment does happen, it's not going to be from any of these companies. It's going to be from somebody outside of it, looks at it differently and tries something different that works.

Anthropic's IPO is expected in the next month or so, and we're starting to get more leaks. This is a company that has leaked a lot of its numbers in the past. The reporting earlier this week was that we got some information about what their 2025 numbers are and what their commitments are for 2027. But Lou, what did we actually get, because it's not the real full filing?

Lou Whiteman: No, we haven't gotten really anything. We've got somebody leaked something to a couple of sources, is the best we can tell. Reuters and the Financial Times both have some information. It's select information. It's not the most recent information, which is weird. If it was a third party that just had the documents, why would you just copy and paste the old stuff that isn't interesting? With all these things, we can get into what's there. This is true with M&A all the time, I think it's true here. Who's leaking it, why they're leaking it? Why now, to me, is almost more interesting than the numbers. The numbers, we can get into it. There's some things there, but it's mostly just confirming everything we thought.

Travis Hoium: Rachel, what are the numbers that we need to keep an eye on at least from what we learned so far? Then I do want to get to how that translates to what we should be looking at when the official S1 comes out.

Rachel Warren: There's a few key numbers to look at. I mean, some of this is from 2025, and then we, of course, expectations for 2026. I mean, you should know that about a quarter of Anthropic's entire 2025 revenue came from just two customers. They are operating at a total net loss of about 42 billion. That was largely driven by a $34 billion accounting charge. If you strip that out, the operating loss was still $8 billion. Anthropic spent more than $7 billion on infrastructure in 2025 alone, and they have disclosed commitments to spend $518 billion on Claude computing power over the next decade. There's a couple other things I want to hit here. They're seeking a $2 trillion valuation. You put that on their $4.6 billion 2025 revenue, that's a 434 price-to-sales multiple. Now, their exit run rate for the end of 2026 is supposed to hit anywhere between $100 billion and $120 billion.

Let's say they hit the lower end of that range, $100 billion in revenue. That $2 trillion valuation comes down to a 20 times forward price-to-sales multiple. But most of that funding is coming from big tech, private credit packages, venture capital. Google and Amazon, they give billions to Anthropic. Anthropic immediately hands those billions back. It's a circular wheel of funding, which is something I've talked about on prior episodes. I am very curious what the final prospectus is actually going to look like. But these are some real numbers that we're looking at, and I think it paints at least a story where we still have way more questions than answers.

Travis Hoium: Lou, just some context on that $518 billion number. That is commitment over the next decade. It's not just a single year, but Alphabet generated $446 billion in revenue over the past year. We're talking about Anthropic saying, Hey, we're going to be one of the biggest companies in the world relatively quickly.

Lou Whiteman: It's a Mark Twain line. There's lies, damn lies, and statistics. Numbers without context are just numbers. Again, we're talking to investors here. As investors, I don't think there is anything in any of this that is actionable. Now, it's a good thing because we're going to have to see the S1 before we can take action. But look, there are other numbers floating around online that I can't give any credibility to either, because, again, we're not seeing them, but that would imply that the recent few months' revenue growth does not look like what they had hoped for, maybe even when they were writing the S1.

Travis Hoium: This goes from they were flying high late in 2025 and early in 2026 when everybody suddenly was using Claude, when it was being integrated into. It was the coding one that all programmers were using, and then suddenly, Chaim tea and OpenAI catch up, Gemini gets this act together a little bit. That's the context behind what you're saying.

Lou Whiteman: This is bubblegum. This is stuff that people like us love to just chew on for a while, and it makes for great headlines and great fodder. But really, we don't know anything other than, okay, some of my prayers seem to be confirmed, and some of them maybe, things are going differently. Let's just wait and see the S1 and judge that because, again, a number without context, a number without a historical trend, is just a number, and there's just not much here that I think we can draw conclusions from.

Travis Hoium: Speaking of upcoming IPOs, we had one that was pushed back this week. Talk about that in a month.

Welcome back to Motley Fool Hidden Gems Investing. We learned that Aura's IPO has been pushed off. This is the ring company helping track your health, getting data all the time about your heart rate and things like that. They were looking for a $15 billion valuation that's more than 10 times sales. They were supposedly oversubscribed. They were supposed to go public earlier this week, but Lou, they did not. Why does this happen? What does it say about the IPO market right now?

Lou Whiteman: I think it says what we already know. Look, it's weird. Well, in some sense, the markets are near an all-time high, but if you look at volatility and specifically single-stock volatility, one thing you can look at is a form of the VIX. VIX is a measure of volatility. Looking at single stocks versus the VIX, and that is at a spread that is very unusual, which I think speaks to the choppiness in the market. We'll talk about AA. We can talk about Holtech, SB Energy, Inspire Brands, the Dunkin' Donuts owner, Bamboo Insurance, and about a dozen more who have delayed IPOs citing market conditions. There are other reasons. The last month or so, that's just from my syndicate list, just looking at it.

This is not a great time. Volatile times are the worst times to take a company public. The mechanisms of going public is you have to build your order book. You have to build buyers and sellers ahead of the launch, and they have to commit, and when you commit, you don't want volatility. You're putting your money out of your hands for 72 hours in some cases. It is really hard for the banks behind an offering to manage an offering, keep it stable when things are volatile right now. I don't even know if this is AA's decision. It could be the banks just saying, Look, IPOs, they really love to make them control. They really like it to be orderly. It's almost like trying to go fishing in a hurricane. You may be fine. It might turn out you can probably get your hook in the water, but it's not going to be a smooth sail. I think that this is just a simple case of the bankers recognizing the market. They're pulling them left and right here and saying, Let's just wait until the volatility goes down, and then we can do a more controlled offering.

Travis Hoium: Rachel, what do you think about this in relation to some of the bigger IPOs that we may have not only in the next month but in the next six months, because Anthropic, like we mentioned earlier, hoping to go public in the next month. Although there was talk that it may have already been public by now. OpenAI's, the other one talking about early 2027, those are maybe bigger. Maybe don't have quite as volatile IPO with a $1 trillion valuation than you do with a $15 billion valuation. But it seems like a strange time in the market given the fact that we are near all-time highs, but companies are saying, we're going to wait until things are even better.

Rachel Warren: I think what's happened with [inaudible] and some of these other companies that have delayed their IPOs. I think it's a very different story than the interest and likely hype and excitement we'll see in the markets around IPOs, like the anticipated ones of OpenAI and Anthropic. I think, if anything, if you're an AI-focused company right now, the window is wide open, I think, but for everyone else, it's narrowed significantly. It's interesting [inaudible] had just launched their IPO plan last week, so there's a very sudden pullback. The deal was reportedly four times oversubscribed. Institutional buyers were fighting on the price, and it forced demand at the bottom of the range. I think there's an understanding that investors are not willing to pay the favorable multiples of years gone by for consumer hardware companies, essentially. We're seeing, of course, rising sovereign debt yields, surging borrowing costs are impacting investors, and I think demanding wide pricing discounts to offset rising interest rates. There's, I think, a lot of concern about how that impacts some of these private companies entering the public markets.

s Lou noted, there's been a string of other IPO delays and withdrawals. I think there's also the idea that some of these companies, pulling their listings essentially close to the finish line. They might struggle to find another open window to return to the public markets anytime soon. I think it also highlights this idea that, whereas once a really strong consumer brand, a popular flagship product. In this case, or are the profitable, revenues growing favorably. They have millions of users. That's not enough to guarantee a successful public debut, at least not in this market. I think the interest, the real tailwinds, are centered on the AI companies right now, and I think at least for the foreseeable future, that will probably remain the case.

Travis Hoium: Yeah, it'll be interesting to see how these companies are going to be able to finance themselves in the future, too. Not just Aura, but some of these companies are still burning money. It's easier to do that in public markets when you can go access public debt, which they can do as private companies, but also just sell a little bit more stock if you need to. We've seen that often. Even SpaceX did that shortly after their IPO, just to raise more funds. The options get a little bit fewer when you stay in those private markets. That's been OK for now, but I would like to see some of these companies go public to actually see what the real valuation ends up as.

As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows The Motley Fool's editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure. Please check out our show notes. For Lou Whiteman, Rachel Warren, and Dan Boyd behind the glass, I'm Travis Hoium. Thanks for listening. We'll see you here tomorrow.

Lou Whiteman has no position in any of the stocks mentioned. Rachel Warren has positions in Alphabet, Amazon, and Apple. Travis Hoium has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.