OpenAI is preparing to file for an IPO in the coming weeks
OpenAI, maker of chatbot ChatGPT, is preparing to file an initial public offering in the coming weeks, two people with knowledge of the matter said, laying the groundwork for one of the biggest offerings of an artificial intelligence company to raise the stakes in the tech race.
OpenAI is working with Goldman Sachs and Morgan Stanley to prepare the paperwork, said the people, who were not authorized to speak publicly about the private discussions. OpenAI is watching the stock market closely, they added, and the timing of any filing remains in flux. If the filing comes early, the IPO could happen as early as September.
“As part of normal management, we regularly evaluate a number of strategic options,” an OpenAI spokesperson said in a statement. “Our focus remains on execution.”
OpenAI is one of the most anticipated potential IPO candidates this year in what is expected to be a lucrative string of tech company offerings. SpaceX, Elon Musk’s rocket and satellite company, which has valued itself at more than $1 trillion, is on track to go public as early as next month. And Anthropic, one of OpenAI’s fiercest AI rivals, raising $900 billion in cash, has also taken steps to go public.
OpenAI, which is based in San Francisco, was valued at $730 billion on the private market after this year’s funding round, excluding the latest investment.
The IPO boom would likely unleash a flood of generational wealth, creating the world’s first billionaires and consolidating the fortunes of a number of Silicon Valley tech executives who are already billionaires. It would also bring a bonanza to AI workers, Wall Street banks and others.
Artificial intelligence companies could hit the stock market, even as the technology they created has drawn intense opposition. Communities around the world are resisting having AI data centers built in their backyards. In the United States, a growing national movement of parent groups, religious leaders, environmentalists and former Tea Party activists is also resisting artificial intelligence, a technology that many fear could harm their jobs, national security, the environment and people’s mental health.
OpenAI cleared a significant hurdle to a possible IPO on Monday when a federal judge and jury rejected Mr. Musk’s lawsuit that sought to unravel the profitable company that OpenAI created last year.
The Wall Street Journal earlier reported on OpenAI’s IPO plans. (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.)
OpenAI, led by Sam Altman, its CEO, started the AI boom in late 2022 with the release of ChatGPT. But it faces growing competition from Antropic and Google, which offer similar technologies.
After raising more than $180 billion during its existence, the company is far from profitable.
OpenAI made more than $13 billion in revenue last year, but expects to spend $115 billion over the next four years. Revenue is growing from ads on the consumer version of ChatGPT and as the company continues to sell its technology to businesses and independent software developers.
ChatGPT has over 900 million monthly users. But at its annual developer conference on Tuesday, Google said its Gemini app now has 900 million active users. The tech giant, which also operates cloud computing and manufactures its own AI chips, has mounted a significant challenge to ChatGPT through its search engine, where it now offers similar AI technology.
At the same time, OpenAI faces a commercial challenge from Anthropic, a company founded by former OpenAI employees. Dario Amodei, CEO of Anthropic, recently said that his company had planned to grow about 10 times this year, but achieved a growth rate that could be 80 times this year. Much of this growth is due to the company’s AI-based software coding product, Claude Code, which allows users to create complex programs without any coding experience.
Last month, Anthropic unveiled a new version of its Mythos technology, saying the technology was too dangerous to make public because it could be used to identify security weaknesses in the computer software that underpins the Internet. He shared the Mythos with a small group of technology companies and organizations.
OpenAI soon discovered similar technology and took a different tack, sharing the technology with a much larger group and cybersecurity experts. The tech has also upgraded its consumer chatbot.
Mr Musk, Mr Altman and a group of AI researchers founded OpenAI in 2015 as a non-profit organization committed to building AI for the benefit of humanity. After a power struggle, Mr. Musk left the lab in 2018. Mr. Altman then merged the AI lab into a for-profit company and began raising billions of dollars from investors, including Microsoft.
Following the success of ChatGPT, Mr. Musk sued Mr. Altman and OpenAI in 2024, accusing them of abandoning the lab’s original mission by prioritizing commercial profit over the public good. While Mr Musk’s claims were dismissed this week, he said he would appeal the court’s decision.