With 900 million weekly users, $25 billion in annualized revenue and a $14 billion projected loss, OpenAI is preparing to ask the public to buy in.
The Wall Street Journal reported the company is working with Goldman Sachs and Morgan Stanley on a draft IPO prospectus. The company plans to file it confidentially with regulators as early as Friday (May 22) with a target public debut as early as September, according to people familiar with the matter.
OpenAI was valued at $852 billion in its most recent funding round. CEO Sam Altman has pushed for a listing, but CFO Sarah Friar has privately told company leaders the firm may need more time, the Journal reported.
The potential IPO comes as OpenAI faces growing competitive pressure. The Journal reported the company recently missed multiple internal revenue and user targets. Meanwhile, rivals Google and Anthropic have both taken market share.
Anthropic has grown faster than OpenAI in recent months. Its software tools have spread quickly across business customers. OpenAI is now responding. As PYMNTS reported in March, applications CEO Fidji Simo told staff the company is pausing side projects to focus entirely on coding and business users. She called the moment one the company cannot afford to miss.
OpenAI also cleared a legal obstacle this week. OpenAI won a court fight with Co-founder Elon Musk, who had tried to block the company’s conversion to a for-profit structure. Musk has said he plans to appeal.
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Going public does not solve OpenAI’s spending problem. It may only make it more visible.
As PYMNTS reported, Friar said the company is seeing strong demand but not enough computing infrastructure to meet it. She said OpenAI may need to raise more capital, just six weeks after closing a $122 billion round. The WSJ separately flagged investor concerns about whether revenue can keep pace with the company’s ambitions.
Friar said she has spoken with numerous banks and financial institutions. Not one, she said, lacks AI at the top of their agenda. Whether that demand translates into the margins public investors will expect is the open question heading into any roadshow.
