OpenAI, the creator of ChatGPT, filed confidentially for a public listing on Monday, following a similar filing by rival Anthropic last week, as AI developers compete to cash in on surging investor interest in artificial intelligence.
It is the first step to start gauging investor interest in what would probably be one of the biggest IPOs in history.
“There are things we want to do that are likely easier as a private company,” OpenAI said in a statement. “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 company didn’t disclose any details about the terms of the listing, target valuation or the money it is looking to raise. OpenAI was last valued at $852 billion.
When a private company plans to list on a public market, the S-1 is the initial filing the company submits to the U.S. Securities and Exchange Commission.
Both OpenAI and Anthropic filed the S-1 “confidentially,” without divulging sensitive information. OpenAI is working with Goldman Sachs and Morgan Stanley on the potential listing.
Founded a decade ago, OpenAI kicked off the modern AI boom with the release of ChatGPT in 2022. The chatbot, capable of conversing in natural language, captivated global audiences and has since developed advanced coding, voice interaction and image generation capabilities. It has more than 900 million users a week.
Why is OpenAI listing?
Having shares listed on a stock market could give it access to much-needed capital to grow and compete. Its rival Anthropic has blown past it since December thanks to the wild success of its agentic coding assistant, Claude Code.
While Anthropic focused on selling its chatbot to enterprises, OpenAI built its chatbot for the mass market and invested in multiple disparate initiatives, including video generation and shopping. Earlier this year, the company shut down or delayed several initiatives and began focusing on making its coding agent, Codex, more broadly available. Despite raising more than $185 billion since its founding in 2015, the company isn’t close to profitability.
In March, it said it generates $2 billion in monthly revenue, noting that it has been able to increase the pace of ad sales inside ChatGPT and grow the adoption of its Codex agent. Still, the company will reportedly burn through more than $100 billion by 2029.
What will they use the money for?
The leading private AI companies are locked in a competitive dash to the public markets.
Their goal is to secure the billions of dollars required for their capital-intensive projects to build artificial general intelligence, a broadly capable computer system that is smarter than humans at all cognitive work. To achieve that, the companies need to have costly high-end chips, build expansive data centers, manage power requirements and recruit top-tier researchers who demand multimillion-dollar offers.
OpenAI has partnerships to develop its own chips in a bid to control the rental expenses it currently pays cloud providers.
This is a blockbuster year for Silicon Valley, and the listings will pressure-test investor appetite for the promise of AI.
Anthropic, valued at $965 billion, is currently ahead in filing the S-1. Analysts note that the valuation Anthropic sets will constrain OpenAI’s ability to set its own price when it goes public. Elon Musk’s SpaceX — which operates the chatbot Grok — is going public on Friday at a valuation of $1.8 trillion.
If all three listings proceed by the end of the year, the combined new cash the three companies raise will be $180 billion to $365 billion, which is more than all the money raised by all U.S. companies in 2021, according to PitchBook, a data provider.
What does the market think?
OpenAl is not the leader it once was. It is now the second-most-valuable Al company in a three-way IPO race.
Investors will keep their eyes peeled for the exact financial details, which have so far eluded scrutiny. Bank of America analyst Michael Hartnett has already warned that the mega IPOs-driven retail mania risks creating a bubble similar to the 1920s.
Investor anticipation of getting hold of hot stocks is still high. However, some are worried about the sustainability of the businesses due to mounting losses and have warned of the risk of retail investors getting burned as institutional investors cash in.
Nvidia, which operates a highly profitable business making the expensive chips AI runs on, fell as much as 4% in midday trading Tuesday. Other AI companies have also been hit as investors expect these huge listings to draw money away from them.
“OpenAl’s $1 trillion listing is a bet on a company that has never been profitable, in a market it is currently losing, with a cost structure it cannot change for at least another year, financed by a partnership whose most consequential clause has not been written — all while racing a direct competitor through the same SEC process in the same quarter,” Harrison Rolfes, senior research analyst at PitchBook, wrote in a note.
OpenAI also projects $2.5 billion in 2026 advertising revenue and has projected $100 billion by 2030, which has no precedent.
Rolfes pointed out that OpenAI would need to build an ad business in roughly one-third the time TikTok has spent attempting the same milestone, which even TikTok has not reached after more than six years of existence.
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