Morgan Stanley revisits base rates for high growth companies, using OpenAI’s revenue forecasts as the central case study. The authors find that OpenAI’s projected growth would be unprecedented among comparable U.S. public companies since 1950, even after considering inflation, sector mix, and AI’s unusual adoption speed.
Bayes and Base Rates 2.0
Morgan Stanley
Michael Mauboussin, Dan Callahan
Research
10 Pages
Key Takeaways
Forecasts Look Extreme: OpenAI’s updated 2029 sales forecast implies 118% annual growth from 2024, above any comparable U.S. public company since 1950.
Base Rates Matter: Among 19,264 firm periods with $2 billion to $5 billion starting sales, nominal growth averaged 6.9% with 11.1% deviation.
AI May Differ: ChatGPT reached 100 million monthly users in 2 months, but most historic top growth cases relied heavily on M&A.
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