OpenAI on Monday said that it had confidentially filed for a US initial public offering (IPO), becoming the third major AI company to move toward a Wall Street debut as investors seek exposure to the booming sector.
This comes after its rival Anthropic filed for an IPO earlier this month, while Elon Musk’s SpaceX publicly filed for its highly anticipated US initial public offering last month.
When will OpenAI enter the market?
While the company announced the move on social media platform X as they “expected a leak”, it added that it has not decided on the timing yet and it may be a while before they enter the market.
The ChatGPT-maker said that the IPO may take a while because there are “things we want to do that are likely easier as a private company.”
“We recently submitted a confidential S-1. 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,” it said on X.
“This announcement is being made pursuant to Rule 135 under the Securities Act of 1933, as amended, and does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offers, solicitations of offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act,” it added.
OpenAI CEO Sam Altman first raised the prospect of an IPO last fall, calling it the company’s “most likely path” given its scale and the substantial capital required to further develop its AI technologies, AP reported.
The filing comes at a critical juncture for OpenAI, which analysts reportedly say is facing mounting competition from Google and Anthropic and may be losing some of ChatGPT’s early advantage among consumers and businesses. Emarketer analyst Nate Elliott described the timing as “precarious” for the company.
“But OpenAI doesn’t have a lot of other places to look for the enormous capital required to support its costs,” Elliott said, according to The Associated Press.
In an interview with AP in April, OpenAI’s chief financial officer Sarah Friar had declined to give a timeline for a potential IPO but said the company was already “acting with the good hygiene of a public company.”
“I want us to be ready,” she told AP. “I think it’s good to be able to tap the public markets. They’re much bigger than the private markets.”
Anthropic, Space X IPOs
AI giant Anthropic confidentially filed for a US IPO earlier this month and raised last raised $65 billion at a post-money valuation of $965 billion in late May, putting it ahead of rival OpenAI, according to Reuters.
Musk’s SpaceX also filed for an IPO last month. The company has since accelerated its listing plans, targeting a roadshow launch on June 4 and a share sale as early as June 11, Reuters reported last week, citing sources familiar with the matter.
If SpaceX raises $75 billion, it would become the world’s largest IPO, surpassing the record set by oil giant Saudi Aramco’s 2019 listing, according to Reuters.