OpenAI announced Monday that it has confidentially filed paperwork for an initial public offering (IPO), positioning the ChatGPT creator for one of the most richly anticipated market debuts in recent memory.
The move intensifies a high-stakes capital race in artificial intelligence (AI). Last week, rival Anthropic submitted its own confidential filing, and days before Elon Musk’s SpaceX — which recently integrated with xAI — is scheduled to begin trading in what Wall Street expects to be the largest IPO ever.
In a statement published on its website, OpenAI confirmed it recently submitted its Form S-1 to the Securities and Exchange Commission (SEC). The confidential route allows the company to secure regulatory feedback before exposing its financial details to the public.
“We expect it to leak so we’re just announcing it,” OpenAI said. “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.”
The decision to seek public capital comes as OpenAI balances immense valuation with massive operational expenses. Most recently valued at $852 billion post-money in March, the company continues to burn through billions of dollars to secure advanced computing power and build out the infrastructure required to train next-generation AI models.
To alleviate near-term liquidity demands, OpenAI reportedly plans to facilitate a tender offer allowing employees to sell shares at its latest valuation. Wall Street giants Goldman Sachs and Morgan Stanley are reportedly leading the filing.
Since rocket-launching into the mainstream with ChatGPT in 2022 — which now commands over 900 million weekly active users — OpenAI has pivoted toward stricter fiscal discipline. Under CEO Sam Altman, the company recently shuttered peripheral projects, including its short-form video app Sora, to double down on enterprise software and its coding assistant, Codex.
In a blog post Monday, Altman declared the beginning of “the third phase of OpenAI,” shifting focus from pure research and product development to reshaping the broader economy. “The central question now is how to make advanced AI abundant, affordable, safe, useful, and easy enough for every person and organization to benefit from it,” Altman wrote.
The filing follows a major legal victory for OpenAI. Weeks ago, a federal judge dismissed a lawsuit brought by co-founder Elon Musk, who alleged Altman and President Greg Brockman breached a founding agreement to keep the entity a nonprofit. A California jury ruled Musk filed outside the statute of limitations. While Musk criticized the verdict as a “calendar technicality” and vowed to appeal, the ruling removed the final major hurdle to OpenAI’s listing.
A successful IPO could also prove a windfall for Microsoft Corp., OpenAI’s primary backer. Following a restructuring of their partnership, Microsoft holds a 27% stake in OpenAI’s for-profit arm. However, the relationship has grown complex; a recent contract amendment allowed OpenAI to license its models to alternative cloud providers amid ongoing constraints on Microsoft’s computing capacity.
OpenAI now faces a race against Anthropic and Google to capture investor appetite for high-cost, high-reward AI infrastructure.
