Cloudflare

OpenAI

Cloudflare

Cloudflare operates on a freemium model with usage-based pricing. The free tier provides basic CDN, DDoS protection, and SSL for any website — this is how millions of sites use Cloudflare without paying a cent.

Paid plans start at $20/month (Pro), $200/month (Business), and custom enterprise pricing for large organizations.

The free tier is the growth engine, not charity. Every free website that routes through Cloudflare adds data to the network — more traffic patterns to analyze, more attacks to learn from, more threat intelligence to feed the machine learning models.

Free users make the paid product better.

Enterprise contracts are where the real money lives. Large organizations pay six and seven figures annually for advanced security, performance, and compliance features.

Revenue reached $1.67 billion in 2024 and kept compounding at roughly 28% a year. The company has been approaching profitability with improving margins.

OpenAI

OpenAI makes money primarily through API access and subscriptions. The API charges developers per token (roughly per word) for using GPT models in their applications.

ChatGPT Plus costs $20/month for individual users, ChatGPT Team is $25-30/user/month, and ChatGPT Enterprise is custom-priced. Microsoft pays OpenAI licensing fees and also resells OpenAI models through Azure OpenAI Service.

OpenAI's annualised revenue ran past $13 billion during 2025 and kept climbing from there, which is the kind of growth curve that normally only exists in a pitch deck.

Cloudflare

The origin story starts with Project Honey Pot, a free open-source project that Matthew Prince created in 2004 to track online spammers and hackers. The project grew to track millions of malicious IP addresses, and the Department of Homeland Security started using the data.

But Prince noticed something: he had all this threat intelligence and no good way to help website owners actually use it.

At Harvard Business School in 2009, Prince teamed up with Michelle Zatlyn for a class project exploring how to turn that threat data into a product. Their professor gave them a B — which Prince has jokingly called the most expensive B in HBS history, given what the company became.

They brought in Lee Holloway, a brilliant but unconventional systems programmer Prince had worked with previously, as the third co-founder and technical architect.

Cloudflare launched publicly at TechCrunch Disrupt in September 2010 with a bold pitch: sign up for free, change your DNS, and Cloudflare will make your website faster and more secure. No hardware to install.

No software to configure. Just a DNS change.

In the first day, thousands of websites signed up. The simplicity was the product — in an industry where security meant expensive appliances and complex configurations, Cloudflare said "just point your domain at us and we'll handle it."

OpenAI

OpenAI was founded in December 2015 as a nonprofit AI research lab. The founding donors — including Elon Musk, Sam Altman, Peter Thiel, Reid Hoffman, and Jessica Livingston — pledged $1 billion with a mission to build artificial general intelligence (AGI) that would benefit all of humanity.

The idea was that AI was too important and too dangerous to leave in the hands of Google alone.

Sam Altman became chairman while Greg Brockman (former CTO of Stripe) became president. Ilya Sutskever, one of the most respected AI researchers alive, left Google Brain to become chief scientist.

The early team was stacked with world-class researchers who published their work openly — hence "Open" AI.

But AI research turned out to be staggeringly expensive. Training large models required millions of dollars in compute.

In 2019, OpenAI created a "capped-profit" subsidiary — investors could earn up to 100x their money, but profits beyond that would flow to the nonprofit. Microsoft invested $1 billion.

The mission was still to save humanity. The method now involved making a lot of money first.

Cloudflare

Cloudflare grew by being free. The free tier removed every barrier to adoption.

A blogger in India and a Fortune 500 company could both sign up in five minutes. This created a massive installed base that generates word-of-mouth, training data, and upsell opportunities.

The developer community became the second growth engine. Cloudflare Workers turned the company from a security vendor into a cloud computing platform.

Developers build entire applications on Cloudflare's edge network, which creates deep technical lock-in. Once your application runs on Workers, migrating to AWS Lambda is a significant engineering effort.

Strategic pricing warfare accelerated commercial adoption. When Cloudflare launched R2 storage with zero egress fees, it directly attacked Amazon S3's most hated pricing model.

The "Bandwidth Alliance" partnered with cloud providers to eliminate data transfer fees. These moves positioned Cloudflare as the anti-AWS — the cloud company that doesn't nickel-and-dime you.

OpenAI

ChatGPT's launch in November 2022 was the growth strategy — it just wasn't planned that way. The team expected a modest research preview.

Instead, ChatGPT hit 1 million users in 5 days and 100 million monthly active users in 2 months, making it the fastest-growing consumer application in history. The product went viral because it felt like magic — for the first time, anyone could have a natural conversation with a machine that seemed to understand them.

The Microsoft partnership provided distribution at massive scale. Microsoft integrated OpenAI models into Bing, Office 365 (Copilot), GitHub (Copilot), and Azure.

Overnight, hundreds of millions of Microsoft users had access to OpenAI technology. Microsoft's $13 billion investment was the largest AI bet in history and gave OpenAI nearly unlimited compute.

The API created an ecosystem. Thousands of startups built products on top of OpenAI's models — from customer service bots to coding assistants to content generators.

Each API customer locked themselves into OpenAI's ecosystem, creating switching costs and recurring revenue.

Cloudflare

AWS, Google Cloud, and Microsoft Azure are simultaneously partners and competitors. Cloudflare's network sits in front of these clouds, which makes the cloud providers uncomfortable.

As Cloudflare expands into compute (Workers), storage (R2), and databases (D1), the competitive overlap grows. The cloud providers could theoretically build or acquire similar capabilities and bundle them for free.

Profitability pressure is real. Cloudflare has prioritized growth over profits, spending aggressively on network expansion and R&D.

Operating margins have been negative for most of the company's public life, though they've been improving. Investors have tolerated this during growth-stock mania but patience may not last forever.

Content moderation controversies arise periodically. As a company that provides infrastructure to millions of websites, Cloudflare occasionally faces pressure to terminate service to controversial or harmful sites.

They removed 8chan after the El Paso shooting in 2019 and the Daily Stormer in 2017. Prince has described these decisions as uncomfortable, arguing that infrastructure providers shouldn't be arbiters of online speech but sometimes have no choice.

OpenAI

The board crisis of November 2023 nearly destroyed the company. The nonprofit board fired Sam Altman as CEO on a Friday, citing a loss of confidence.

Within 48 hours, 95% of employees threatened to quit and follow Altman to Microsoft. By Tuesday, Altman was reinstated and the board was restructured.

The incident exposed the fundamental tension between OpenAI's nonprofit governance and its for-profit ambitions — a tension it finally addressed in late 2025 by restructuring the business as a public benefit corporation sitting under the original nonprofit.

The cost of training frontier models is eye-watering. Each new GPT generation costs hundreds of millions to train.

OpenAI is reportedly spending over $7 billion annually on compute. The company is burning through cash faster than almost any startup in history, which is why it keeps raising at higher and higher valuations.

If revenue growth slows before costs stabilize, the math gets ugly.

Safety concerns are not going away. Multiple prominent researchers have left OpenAI over disagreements about the pace of development versus safety research.

Ilya Sutskever, the chief scientist who was central to the board's decision to fire Altman, left in 2024 to start a safety-focused AI lab. The public debate about whether OpenAI is moving too fast — and whether its safety commitments are genuine — grows louder with every capability improvement.

Cloudflare

Cloudflare CDN — a content delivery network spanning 330+ cities in 120+ countries that caches and serves web content from the nearest location to each user, making websites dramatically faster. Cloudflare DDoS Protection — automatic detection and mitigation of distributed denial-of-service attacks.

Has blocked some of the largest DDoS attacks in internet history, including a 71 million requests-per-second attack in 2023. Cloudflare Workers — a serverless computing platform that lets developers deploy code to Cloudflare's edge network, running applications in 330+ locations worldwide with millisecond latency.

Cloudflare Zero Trust — a complete security platform replacing traditional VPNs and firewalls with identity-based access controls for remote workforces. Cloudflare R2 — object storage that competes with Amazon S3 but with zero egress fees, saving companies thousands on data transfer costs.

OpenAI

ChatGPT is the consumer chatbot — the product that made AI mainstream overnight. The flagship GPT models are multimodal, handling text, images, and audio in one system.

The OpenAI API lets developers integrate GPT into any application. DALL-E generates images from text descriptions.

Whisper transcribes and translates audio. Sora generates videos from text prompts.

GPT Store lets users create and share custom GPT agents. ChatGPT Enterprise gives businesses a private, secure version of ChatGPT with admin controls and no data training.

Cloudflare

New Enterprise Associates (NEA) led the Series A. Venrock, Pelion Venture Partners, and Union Square Ventures invested early.

Fidelity, Microsoft, Google Capital (now CapitalG), and Baidu all invested in later rounds — notably both Google and Baidu investing in the same company. The September 2019 IPO raised $525 million at a $4.4 billion valuation.

The stock has since grown significantly.

OpenAI

Microsoft ($13B), Thrive Capital, Khosla Ventures, Sequoia Capital, Founders Fund, Tiger Global, SoftBank, a16z