OpenAI has opened confidential filings for an initial public offering, the company announced on Monday, kicking off a potentially months-long process toward a U.S. stock market listing. The move makes it the third company to file for what could be a trillion IPO this year.
Tech companies following AI’s most powerful models, including business giants Alphabet, Amazon, Metaand Microsoft, are hungry for tens of billions of dollars each to build more data centers and hire scientists to develop their services.
An IPO will be another opportunity to raise money OpenAI after the company privately raised $122 billion in March. Going public, which brings many employees closer to a life-changing day and increases transparency about a business’s financial health, could also boost employee morale and customer confidence as OpenAI tries to reclaim its position as a front-runner for frontier AI.
OpenAI did not specify the timing of the IPO or how much it plans to raise. “We recently filed a confidential S-1,” the company said he said in an unsigned one-paragraph blog post. “We expect it to leak so we’re just announcing it. We haven’t decided on a time frame yet; it could be a while because there are things we want to do that might be easier as a private company. But it’s a complicated series of exchanges and this gives us an opportunity to go public early if that ends up being better.”
OpenAI declined to comment further. But with the paperwork in place, the company can prepare a successful first offering with Anthropic. If the opponent faces any challenges, OpenAI can stop and rebalance.
Three Way Race
Anthropic, which was founded in 2021 by former OpenAI employees, filed its confidential IPO paperwork on June 1. Days before the filing, Anthropic’s latest funding brought its valuation to $965 billion, surpassing OpenAI’s $852 billion mark—both record-breaking figures in the tech venture capital world. Elon Musk’s SpaceX, which builds rockets, sells satellite networks, and also develops the world’s most powerful AI models, made public its IPO papers last month.
IPOs could value each of these companies at more than $1 trillion despite all of them being unprofitable and having sales 80 to 90 percent lower than nearly every trillion-dollar public company in existence. The only IPO to break the $1 trillion mark was oil company Saudi Aramco in 2019.
OpenAI’s revenue from subscriptions, ads, and service fees grew between $10 billion and $20 billion last year, according to previous company disclosures. But it spent more money on cloud computing and thousands of employees, causing billions of dollars in losses. In recent months, the company has made several adjustments due to functional diseases and try to focus on a few projects.
OpenAI executives have discussed for months whether the company is ready to go public, according to two people familiar with the matter but not authorized to discuss confidential information. At one point last year, OpenAI was targeting an IPO in late 2027 or early 2028, according to another person familiar with the discussions.
Last week, President Donald Trump said his administration would look into the possibility of the US government taking stakes in AI companies when they go public. OpenAI has discussed the idea for months as a way to expand the public benefits of AI development, according to one of the people familiar with the company’s discussions. An OpenAI blog post hosted by CEO Sam Altman on Monday said “a bright future for AI” requires that “many people, companies, communities and countries can build, benefit, and hold power.”
Legal Challenges
In 2019, OpenAI created a for-profit subsidiary to allow it to raise more money than it believed people would be willing to contribute. Today, the nonprofit owns about 25 percent, or more than $200 billion, of the company. It also has the ability to block major business decisions and fire company executives. Dissolving a nonprofit organization is a legal challenge.
Recently, OpenAI cleared a major roadblock to its IPO by winning a lawsuit brought by Musk, which accused the developer of ChatGPT of straying from its non-profit mission. Musk claims they were fired last month after a federal judge and jury decided he filed his case too late.
