OpenAI Confidentially Files for IPO on the Heels of SpaceX and Anthropic

OpenAI has filed confidential paperwork for an initial public offering, the company announced on Monday, kicking off what could be a monthslong process toward debuting on a US stock exchange. The move makes it the third company to file for what could be a trillion-dollar IPO this year.

Tech companies pursuing the most powerful AI models, including publicly traded giants Alphabet, Amazon, Meta, and Microsoft, are hungry for tens of billions dollars each to build out more data centers and recruit scientists to grow their services.

An IPO would be yet another fundraising opportunity for OpenAI after the company privately raised $122 billion in March. Going public, which brings many workers closer to a life-altering payday and increases transparency about a business’ financial health, could also boost employee morale and customer confidence as OpenAI tries to regain its position as the clear front-runner in frontier AI.

OpenAI did not specify timing for the IPO nor how much it plans to raise. “We recently submitted a confidential S-1,” the company said in an unsigned, one-paragraph blog post. “We expect it to leak so we’re just announcing it. We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”

OpenAI declined to comment further. But by having paperwork ready, the company could draft off a potentially successful debut by Anthropic. If the rival runs into any challenges, OpenAI could hold off and recalibrate.

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A Three-Way Race

Anthropic, which was founded in 2021 by former OpenAI employees, filed its confidential IPO paperwork on June 1. Just days before the filing, Anthropic’s latest fundraising brought its valuation to $965 billion, topping OpenAI’s $852 billion mark—both record-breaking figures in the world of tech venture capital. Elon Musk’s SpaceX, which makes rockets, sells satellite internet, and also develops some of the world’s most capable AI models, publicly filed its IPO papers last month.

The IPOs could value each of these companies at over $1 trillion despite all of them being unprofitable and having roughly 80 percent to 90 percent lower sales than nearly every existing trillion-dollar public company. The only IPO to have broken the $1 trillion mark was oil company Saudi Aramco in 2019.

OpenAI’s revenue from subscriptions, ads, and service fees grew to somewhere between $10 billion and $20 billion last year, according to previous company disclosures. But it spent far more money on cloud computing and thousands of staff, leading to billions of dollars in losses. In recent months, the company has carried out several restructurings due to executive illnesses and an attempt to focus on fewer projects.

OpenAI executives have debated for months whether the company is prepared to go public, according to two people familiar with the matter but not authorized to discuss confidential information. At one point last year, OpenAI was targeting an IPO in late 2027 or early 2028, according to another person familiar with the discussions.

Last week, President Donald Trump said his administration would look into the possibility of the US government taking a stake in AI companies as they go public. OpenAI has discussed the idea for months as a way to broaden public benefits of AI development, according to one of the people familiar with company discussions. An OpenAI blog post coauthored by CEO Sam Altman on Monday said “a good AI future” requires that “many people, companies, communities, and countries can build, benefit, and hold power.”

Legal Challenges

In 2019, OpenAI created a for-profit subsidiary to allow it to fundraise vastly more sums than it believed people would be willing to donate. Today, the nonprofit owns roughly 25 percent, or more than $200 billion, of the company. It also has the power to block major business decisions and fire the company’s executives. Undoing the nonprofit is legally challenging.

Recently, OpenAI cleared a major hurdle on the road to its IPO by defeating a lawsuit brought by Musk, which accused the ChatGPT-maker of straying from its nonprofit mission. Musk’s claims were dismissed last month after a federal judge and jury ruled that he filed his lawsuit too late.

But OpenAI’s structure is still subject to ongoing scrutiny by California and Delaware state regulators. This month, the California attorney general’s office denied WIRED’s official request for records of recent communications with OpenAI, citing laws shielding investigative and certain other files from public disclosure.

OpenAI will need the US Securities and Exchange Commission to sign off on the company’s accounting and disclosures of potential risks, which is the confidential process that now begins. The company’s structure could add unusual complexity to the review.

Last month, OpenAI’s chief of global affairs, Chris Lehane, told WIRED that the company will retain its structure after the IPO because, as a public benefit corporation overseen by a nonprofit, it can consider societal impacts of its endeavors without having to prioritize shareholder value above all else.

So far, public advocacy groups have been critical of OpenAI’s work. They blame ChatGPT and other similar chatbots for an epidemic of so-called AI psychosis that has led to suicides and other deadly incidents, while labor experts worry about the potential for catastrophic job loss as AI systems take over manual tasks. How OpenAI addresses these harms of AI in its polished paperwork, which would be publicly released closer to the IPO date, will likely draw significant attention.

In San Francisco, where OpenAI and Anthropic have their respective headquarters, residents are already bracing for huge increases in real estate prices. The IPO processes should open up opportunities for employees to sell shares, turning tens or even hundreds of paper millionaires and billionaires into real ones.

At least several early OpenAI employees, including president Greg Brockman and former chief scientist Ilya Sutskever, have become multibillionaires because of the value of the shares they hold in the company, according to testimony they gave in the Musk v. Altman trial.