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 in 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 amount of money it is looking to raise. OpenAI was last valued at $852 billion.
When a private company plans to list on a public market, an S-1 is the initial filing the company submits to the U.S. Securities and Exchange Commission.
Both OpenAI and Anthropic filed their S-1s 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 weekly users.
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 surged past it since December, thanks to the 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 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 adoption of its Codex agent. Still, the company reportedly will burn through more than $100 billion by 2029.
What will it 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 capital-intensive projects aimed at building artificial general intelligence, a broadly capable computer system that is smarter than humans at all cognitive work. To achieve that, the companies need costly high-end chips, expansive data centers, the ability to manage power requirements and top-tier researchers who command multimillion-dollar compensation packages.
OpenAI has partnerships to develop its own chips in a bid to control the rental expenses it currently pays to 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 its 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 total $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?
OpenAI is not the leader it once was. It is now the second-most valuable AI company in a three-way IPO race.
Investors will keep their eyes peeled for the exact financial details, which so far have eluded scrutiny. Bank of America analyst Michael Hartnett has already warned that the mega-IPO-driven retail mania risks creating a bubble similar to that of the 1920s.
Investor anticipation of gaining access to hot stocks remains high. However, some are worried about the sustainability of these businesses because of 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.
“OpenAI’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 advertising 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.