OpenAI files confidentially for IPO as AI companies rush to Wall St.
OpenAI, which started the artificial intelligence boom with its chatbot ChatGPT, confidentially filed for an initial public offering on Monday, laying the groundwork for what could be one of the biggest IPOs to hit Wall Street.
The company has not yet decided when it will go public, it said in a statement to The New York Times.
“It may take some time because there are things we want to do that are probably easier as a private company,” the statement said. “But it’s a complex set of trade-offs, and that gives us the ability to go public early if that’s for the best.”
An OpenAI public offering would join an expected wave of blockbuster IPOs, with Elon Musk’s rocket company SpaceX and AI startup Anthropic also set to go public this year.
OpenAI, which is based in San Francisco, was valued at $730 billion in the private markets after this year’s funding round. That doesn’t include its most recent investment round, which was $122 billion.
The company is far from profitable, even after raising more than $180 billion since its founding in 2015. It had more than $13 billion in revenue last year, but expects to spend $115 billion over the next four years. Revenues grow from the sale of ads on the consumer version of ChatGPT and the sale of various AI technologies to businesses and independent software developers.
SpaceX, which will be valued at $1.77 trillion, filed for an IPO late last month and said it expects revenue to grow to $18.7 billion in 2025, up 33 percent from a year earlier. It could be listed on Wall Street as early as this week.
Anthropic kept confidential for the IPO last week. The startup recently topped OpenAI as the world’s top-flying AI startup, with $65 billion in new funding valuing it at $900 billion before including new capital. The public offering could happen as early as this autumn.
IPOs from the three companies could unleash an avalanche of wealth and create the world’s first billionaire in Mr. Musk, who owns about 50 percent of SpaceX. And they could unlock millions of dollars for AI companies to hire, potentially sparking a real estate and investment boom in tech-centric cities like San Francisco.
But IPOs, which have been widely anticipated by investors eager to get a piece of the tech industry’s artificial intelligence frenzy, come with risks. None of the three companies are considered profitable, and all are saddled with enormous costs as they build massive data centers to power their AI systems. Many local communities are also resisting the construction of the giant complexes, while officials are increasingly concerned that they will lose jobs to the new technology.
As OpenAI considers when to go public, it is also working on a tender offer that would allow employees to sell their shares to private investors, according to a person familiar with the company’s plans who spoke on condition of anonymity. The company has made similar tender offers in the past.
OpenAI started the AI boom in late 2022 with the release of ChatGPT. The company’s CEO Sam Altman has become the public face of this new technology as the number of people using the chatbot each month has grown to more than 900 million. OpenAI now has more than 5,000 employees, up from 300 when it released ChatGPT.
(The New York Times sued OpenAI and Microsoft in 2023, alleging copyright infringement on news content related to AI systems. Both companies denied the claims.)
Founded by former OpenAI employees, Anthropic is one of OpenAI’s biggest rivals, along with Google. Anthropic and Google offer technology that is likely comparable to the GPT technology that underlies OpenAI’s consumer chatbot and its other products.
Anthropic has focused on corporate customers and said it plans to increase its revenue tenfold this year. That turned out to be an understatement; now the company says its sales could increase 80 times this year. Much of this growth is driven by Claude Code, which can generate computer code and help developers create complex software programs.
On the consumer front, Google said last month that its Gemini chatbot had reached 900 million monthly users. The tech giant also has a built-in advantage: a widely used search engine that now has built-in AI technology.
SpaceX also has ambitions in AI after merging with Mr Musk’s xAI start-up. Anthropic recently said it reached an agreement to use all of the computing power at the rocket company’s Colossus 1 data center in Memphis. The move gives Anthropic access to more than 220,000 AI chips and opens the door to a collaboration with SpaceX to create AI data centers in space.
Last year, OpenAI began building its own computing data centers alongside cloud computing company Oracle and Japanese conglomerate SoftBank. But when that effort slowed, OpenAI signed big contracts to use data centers run by Amazon and other companies.