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According to reports, OpenAI, the company behind ChatGPT, is planning for Initial Public Offering (IPO) that could value it at up to $1 trillion. This would make the company one of the largest IPOs ever. Continue reading to find out important OpenAI IPO Details!
The IPO launch could potentially take place in late 2026 or 2027. Those who are familiar with the situation told Reuters that the company may file with regulators as early as the second half of 2026. However, this timeline could change based on business growth and market conditions. OpenAI's Chief Financial Officer (CFO), Sarah Friar, has indicated that the company is aiming for a 2027 listing. Nevertheless, some advisers believe that a late 2026 IPO could happen sooner than expected.
According to Reuters, an OpenAI spokesperson emphasized that an IPO is not the company's primary focus at the moment, stating that their main priority is to build a sustainable business and advance their mission to ensure that everyone benefits from artificial general intelligence (AGI).
OpenAI could raise at least $60 billion, with the possibility of this amount increasing, according to Reuters.
The company plans for an IPO come after a major restructuring that resulted in reduction of OpenAI's dependence on Microsoft and created opportunities for more efficient capital raising. Going public would also let OpenAI make larger acquisitions using stock and would align with CEO Sam Altman's vision to invest trillions into AI infrastructure.
Altman stated in a livestream, "I think it's fair to say it is the most likely path for us, given the capital needs that we'll have," as reported by Reuters.
Originally founded as a nonprofit in 2015, OpenAI later restructured to allow the nonprofit to oversee its for-profit arm. Upon recent changes, the nonprofit now known as the OpenAI Foundation has 26% stake in OpenAI Group. Moreover, the nonprofit also has the right to acquire more shares upon achievement of certain performance milestones. This arrangement makes sure the nonprofit continues being a significant stakeholder in financial success of OpenAI.
The annualized revenue run rate of OpenAI is anticipated to reach around $20 billion by year end. However, the company is also reporting increasing losses despite its valuation of $500 billion, according to Reuters. Investors like SoftBank, Thrive Capital and Abu Dhabi’s MGX could benefit from a successful IPO. Microsoft, which is one of OpenAI’s largest backers, now owns approximately 27% after investing $13 billion, as reported by Reuters.
This move comes amid a surge in the AI-driven public markets. Earlier this year, AI cloud company CoreWeave went public at a valuation of $23 billion. It has seen its value roughly triple since then. Additionally, Nvidia became the first company to reach a market value of $5 trillion. This showcases the strong investor interest in AI companies.
Source: Economic Times
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