OpenAI, the company responsible for developing ChatGPT, has secretly submitted paperwork for an initial public offering (IPO) in the United States, as reported by Reuters recently.
According to Reuters, OpenAI made the confidential filing public on Monday, without disclosing the size or terms of the IPO. The company is aiming for a valuation of up to $1 trillion, with the potential listing anticipated as soon as September.
OpenAI mentioned in a statement that the timeline for the IPO is uncertain, stating, “It may take some time as there are certain objectives we wish to achieve that might be more feasible as a private entity,” as per the report.
This move places OpenAI in direct competition with other AI companies racing to enter the public market. One of its rivals, Anthropic, creator of the Claude model series, submitted its own confidential paperwork on June 1, following a successful $65 billion funding round, valuing the company at $965 billion. Elon Musk’s SpaceX was the pioneer, seeking a $75 billion IPO at a $1.75 trillion valuation. The combined IPOs of these three companies present a significant test of investor interest in high-growth tech stocks.
OpenAI’s financial performance has seen remarkable growth. In March, the company reported generating $2 billion in monthly revenue to investors, a growth rate four times faster than Alphabet and Meta experienced in their early stages, according to Reuters. By the end of 2024, the quarterly revenue was around $1 billion. Earlier this year, OpenAI secured $110 billion in funding at an $840 billion valuation from investors like SoftBank, Amazon, and Nvidia. The company also revealed that ChatGPT has garnered over 900 million weekly active users and more than 50 million paying subscribers.
Despite the impressive revenue growth, OpenAI does not anticipate becoming profitable until 2030, a source familiar with the matter informed Reuters.
The path to the public markets was further cleared by a significant legal victory. In May, a US jury ruled against Elon Musk in his lawsuit against OpenAI, where he claimed the company had deviated from its initial nonprofit mission. This unanimous decision removed a major obstacle for the IPO, as noted by analysts.
OpenAI’s organizational structure, initially established as a nonprofit in 2015 and later adding a for-profit division, has faced scrutiny. Towards the end of 2024, the company announced plans to create a public benefit corporation to attract more investments. Its collaboration with early investor Microsoft, which injected $13 billion into the company since 2019, was recently renegotiated, enabling OpenAI to engage in partnerships with Amazon and Google.
The confidential filing by OpenAI was widely anticipated, with speculations suggesting it would precede Anthropic’s filing. However, Anthropic took the lead following its successful fundraising round. The upcoming period will reveal whether public investors are prepared to value the AI industry at these unprecedented levels.
