OpenAI is reportedly preparing to file for an initial public offering (IPO,) according to The New York Times. If a filing does happen in the near future, the IPO could take place as soon as September.
This is all according to a pair of company insiders who spoke to the paper. They said that OpenAI has been laying the groundwork for an IPO filing via discussions with Goldman Sachs and Morgan Stanley. The company is reportedly keeping a close eye on the stock market to help choose the perfect time to file.
OpenAI has responded to today’s reporting, but with some mealy corporate-speak. “As part of normal governance, we regularly evaluate a range of strategic options,” a spokesperson said in a statement. “Our focus remains on execution.”
OpenAI is one of the biggest companies in the AI space and is valued at $730 billion, according to its latest funding round. It could join a crowded stock market, as rivals SpaceX (which now owns xAI) and Anthropic have both taken steps to go public. SpaceX’s public offering could happen as soon as next month.
This is happening just after the company overcame a hurdle on the way to a potential IPO. A federal judge and jury rejected a lawsuit from Elon Musk this week that could’ve unraveled the for-profit arm of OpenAI.
The company will likely make a huge splash in the market with a public offering, but it’s worth noting that OpenAI’s economic math is a bit, well, strange. There looks to be a massive revenue and spending gap, with the company spending more than it’s been taking in. It reported a loss of $5 billion in 2024, with $3.7 billion in revenue.
Revenue has grown rapidly since then, but so have costs. Altman has committed to spending $600 billion by 2030 on computing infrastructure. This has led experts to predict that the company will lose $44 billion by 2028. Those bullish on OpenAI say it’ll become profitable in 2029 or 2030. That’s a mighty long timeline for a startup to reach profitability.
Finally, there’s the notion of its valuation. It’s worth $730 billion, and much of that is based on prior investments from companies like NVIDIA and Microsoft. This has led to accusations of circular investment, as OpenAI is one of NVIDIA’s biggest customers and Microsoft was the company’s exclusive cloud provider for years.