OpenAI Privately Files for IPO on the Heels of SpaceX and Anthropic

OpenAI has written confidential documents issued to the public earlier, the company announced on Monday, starting what could be months before it starts trading in US stocks. The move makes it the third company to offer what could be a trillion dollar IPO this year.

Tech companies pursuing the most powerful forms of AI, including publicly traded giants Alphabet, Amazon, Trimand Microsoft, are hungry for tens of billions of dollars to build more facilities and hire scientists to expand their operations.

An IPO can be another investment opportunity OpenAI after the company privately raised $122 billion in March. Going public, which brings more employees closer to a life-changing day and increases visibility into business financials, could also boost employee interest and customer confidence as OpenAI tries to reclaim its position as a clear leader on the AI ​​frontier.

OpenAI did not specify the timing of the IPO and how much it plans to raise. “We recently filed a confidential S-1,” the company said he said in unsigned blogs, one paragraph. “We haven’t decided on a time; it could be a while because there are things we want to do that are easier as a private company. But it’s very difficult for businesses and this gives us the opportunity to show ourselves in public soon if this can be very good.”

OpenAI declined to comment further. But with the documents ready, the company can write a letter that could be successful with Anthropic. If the opponent encounters any problems, OpenAI can stop and restart.

Three Way Race

Anthropic, founded in 2021 by former OpenAI employees, filed its confidential IPO documents on June 1. Just days before the filing, Anthropic’s latest investment brought its valuation to $965 billion, surpassing OpenAI’s $852 billion, both of which shattered world records for tech capital. Elon Musk’s SpaceX, which builds rockets, sells satellite internet, and develops some of the world’s most powerful AI, made public its IPO papers last month.

IPOs can value both companies at more than $1 trillion even though they are all unprofitable and have sales volumes 80 to 90 percent lower than nearly all existing public companies. The only IPO to break the $1 trillion mark was oil company Saudi Aramco in 2019.

OpenAI’s revenue from subscriptions, advertising, and service fees grew to between $10 billion and $20 billion last year, according to the company’s previous disclosures. But it spent huge amounts of money on cloud computing and thousands of employees, resulting in billions in losses. In recent months, the company has made several changes due to serious illness and a try to focus on less work.

OpenAI executives have been debating for months whether the company is ready to go public, according to two people familiar with the matter but not authorized to discuss the matter. At one point last year, OpenAI eyed an IPO in late 2027 or early 2028, according to a person familiar with the discussions.

Last week, President Donald Trump said his administration would look into the US government’s ability to get involved in the AI ​​industry when it goes public. OpenAI has discussed the idea for several months as a way to expand the benefits of the AI ​​development community, according to one of the people familiar with the industry discussions. An OpenAI blog post written by CEO Sam Altman on Monday said that “the bright future of AI” requires that “more people, companies, communities, and countries can build, benefit, and be empowered.”

Legal Challenges

In 2019, OpenAI created a for-profit company to allow it to raise more money than it believed people would be willing to give. Today, nonprofits own about 25 percent, or more than $200 billion, of the company. It also has the power to block major business decisions and dismiss the company’s executives. Dissolving a nonprofit is a legal challenge.

Recently, OpenAI overcame a major hurdle on the way to its IPO by defeating a lawsuit brought by Musk, who accused the creator of ChatGPT of straying from his unprofitable project. Musk’s statement was removed last month after a federal judge and jury ruled that he filed his case too late.