OpenAI IPO: ChatGPT maker files paperwork, set to hit Wall Street soon
Silicon Valley giant OpenAI is set to make a debut on Wall Street, as the firm confidentially filed paperwork for an initial public offering (IPO). The firm confidentially filed paperwork for an initial public offering (IPO) with the US Securities and Exchange Commission (SEC).As the filing remains confidential, details such as the number of shares that the ChatGPT maker plans to sell and the potential pricing of those shares have not been disclosed.The planned listing comes amid a wave of anticipated public offerings involving some of the biggest names in AI and technology, potentially giving everyday investors an opportunity to buy into companies at the forefront of the sector.However, the company has not made a final decision on the timing of the listing, saying, “It may be a while because there are things we want to do that are likely easier as a private company.” OpenAI further said that the filing “gives us the option to go public sooner if that ends up being best”.The company also explained why it had chosen to reveal the confidential filing.“We expect it to leak,” OpenAI said, adding that the decision to pursue a public listing “is a complicated set of tradeoffs”.Just last week, OpenAI chief executive Sam Altman told CNBC that he was in no rush to take the company public and would do so “when it makes sense”.
OpenAI enters the race to Wall Street
OpenAI’s announcement comes a week after rival AI company Anthropic revealed plans to pursue its own stock market debut.Both companies now appear set to compete over which firm reaches the public markets first, with neither providing a timeline for when that could happen.Their listing plans also come ahead of SpaceX’s planned Nasdaq debut on Friday. SpaceX expects a share price that would value the company at $1.75 trillion (£1.3tn).Also read | Can Indians invest in SpaceX IPO?The three offerings are expected to account for hundreds of billions of dollars in sales, making them a significant test of investor appetite for AI-focused businesses.Competition between OpenAI and Anthropic has intensified over recent years.Anthropic was co-founded by Dario Amodei after he left OpenAI following disagreements with Sam Altman. Since then, the companies have competed for users, corporate customers and investors.They have also been jostling for higher private market valuations as both inch closer towards the trillion-dollar mark.
OpenAI’s financial portfolio
OpenAI’s latest valuation stood at $852 billion after raising $122 billion in March, according to CNN Business.Despite its enormous valuation, OpenAI has faced growing pressure to prove it can generate the revenue needed to support its market worth.The transition to a public company would provide Wall Street with greater insight into OpenAI’s finances at a time when the company is investing heavily in artificial intelligence infrastructure and computing resources.Investors recently sold off technology stocks amid concerns that valuations across the sector may have risen too sharply.One of the biggest expenses for AI companies is what the industry refers to as “compute,” the infrastructure and processing power required to build, train, test and operate AI products.OpenAI’s compute costs are estimated to exceed $100 billion annually, while its revenue remains only a fraction of that amount.Last November, OpenAI chief financial officer Sarah Friar drew attention after suggesting that the US government should “backstop” the company’s spending on chips and data centres. She later walked back those remarks.For companies such as OpenAI, Anthropic and SpaceX, access to public markets could provide billions of dollars in fresh capital.
Beyond ChatGPT
Over the past year, OpenAI has expanded its services beyond the flagship chatbot. The company launched a lower-priced $8 ChatGPT subscription tier and introduced advertising as part of its monetisation strategy.It reportedly expects the cheaper subscription plan to help increase its subscriber base to 122 million this year and projects advertising to become its largest revenue source by 2030.OpenAI has also introduced a web browser, announced plans to develop consumer hardware products, launched an AI agent capable of coding and managing applications on a user’s computer, and created AI tools for use in government, healthcare and finance.
