OpenAI has confidentially filed for an initial public offering, setting it up for what may be the most highly anticipated market debut in recent history and a massive payday for early investors.
The announcement comes just after OpenAI’s chief rival Anthropic announced plans to go public and ahead of SpaceX’s debut set for Friday.
OpenAI said it has not decided on timing yet.
“It may be a while because there are things we want to do that are likely easier as a private company,” it said in a post on its newsroom page.
The transition to a public company will give Wall Street a window into OpenAI’s financial data as the company has been pouring billions into AI infrastructure and computing resources.
The company was last valued at $852 billion after raising $122 billion in March, but it’s faced pressure to demonstrate it can generate the cash to match that valuation. Sarah Friar, OpenAI’s chief financial officer, raised eyebrows last November when she made comments suggesting the US government should “backstop” the company’s massive spending on chips and data centers, which she later walked back.
OpenAI expanded its monetization options for ChatGPT, its popular chatbot and flagship product, over the past year by launching a cheaper $8 tier and introducing ads. It reportedly expects that cheaper plan to drive its subscriber count up to 122 million this year and projects ads to be its biggest revenue driver by 2030, The Information reported in April.
OpenAI has also sought to prove that it’s more than just ChatGPT over the past year. It’s released a web browser, announced plans to develop consumer hardware products, introduced an AI agent that can code and manage apps on a person’s computer and developed AI tools and programs for use in government, health and finance.
OpenAI was recently handed a courtroom victory when Elon Musk’s lawsuit against the company was barred by the statute of limitations. The lawsuit, had it gone in Musk’s favor, could have resulted in a major shakeup to OpenAI’s leadership just ahead of the IPO.
Still, OpenAI’s path to an IPO hasn’t been entirely smooth. The company is grappling with escalating competition from chief rivals Anthropic and Google, faces lawsuits alleging ChatGPT played a role in shootings and suicides and is combatting general consumer backlash against AI. In 2023, OpenAI almost fell into disarray after CEO Sam Altman was briefly ousted as CEO.
This story is developing.
