OpenAI to File for IPO in September at Potential $1 Trillion Valuation

OpenAI, the creator of ChatGPT, is accelerating its plans for an initial public offering, reportedly preparing to file a draft prospectus that could lead to a September listing at a valuation of over $1 trillion.

"Submitting an IPO application and being truly ready for listing are two different things," Chief Executive Sam Altman told employees in a company-wide meeting, according to people familiar with the matter, who said the company would not rush to public markets if conditions aren't mature.

The AI developer is working with Morgan Stanley, Goldman Sachs, and the law firm Cooley, with a confidential filing to the US Securities and Exchange Commission possible as soon as this week, the Wall Street Journal reported. The move comes just after a California court dismissed a lawsuit from Elon Musk, removing a key legal overhang for the company.

A successful IPO would test public market appetite for the enormous capital expenditures required for frontier AI development, potentially setting a new valuation benchmark for the sector and intensifying its fundraising race against chief rival Anthropic.

Race for Capital Heats Up With Anthropic, SpaceX IPOs

The push to file documents comes as a window of competition for investor capital appears to be closing. Anthropic, a key competitor, is also preparing for a public listing that could come as soon as October. Mr. Altman has privately expressed a desire for OpenAI to be the first of the major AI labs to go public.

Both companies are also navigating the large shadow cast by SpaceX's impending market debut. The aerospace firm is expected to list as early as June 12 at a potential valuation of $1.75 trillion, a mega-offering that could absorb significant market liquidity. By filing now, OpenAI signals to investors to reserve capital for its offering.

Compute Costs Drive Push to Public Markets

The primary driver for the accelerated timeline is the immense and growing cost of building and training advanced AI models. In the company meeting, Mr. Altman noted that OpenAI had recently brought more than 2 gigawatts of computing power online. He also suggested that Anthropic is currently constrained by its own access to computation.

An IPO would provide a massive new source of funding to sustain this spending. The company has already raised nearly $200 billion as a private entity, an unprecedented sum for a startup. Public markets would allow OpenAI to tap a much deeper pool of capital as it competes to maintain its edge in the AI race.

This article is for informational purposes only and does not constitute investment advice.