OpenAI Braces for an IPO, Sparks Two-Horse Race With Anthropic

OpenAI, the tech giant behind ChatGPT, has thrown its hat in the ring for an Initial Public Offering (IPO), kicking off a two-horse race with its rival, Anthropic. For now, the timing and size remain under wraps, but analysts are predicting a valuation of up to $1 trillion for the artificial intelligence (AI) giant.

OpenAI is going public, but no one knows when

After months of speculation, OpenAI has confirmed plans to sell shares to the public via a stock listing. In a post on its website, the company disclosed that it had submitted a confidential draft S-1 with the US Securities and Exchange Commission (SEC) for non-public review. Amid concerns that the confidential filing will leak to the public, OpenAI opted to reveal its intentions to pursue a public listing. Despite the confirmation, the ChatGPT creator clarified that it has yet to decide on a timeline, hinting that the IPO may be several months in the future.

“It may be a while because there are things we want to do that are likely easier as a private company,” read the disclosure. “But it’s a complicated set of tradeoffs, and this gives us the option to go public sooner if that ends up being the best.”

Source: OpenAI

One of the biggest questions surrounding the IPO is how OpenAI’s financial performance compares to the sky-high valuations assigned by private investors. A public filing would eventually provide investors with their first detailed look at the company’s revenue, cost, and profitability. The disclosure is tipped to become one of the most closely watched financial releases in technology history. OpenAI sits at the center of the generative AI boom that began with ChatGPT’s launch in late 2022.

A two-horse race with Anthropic

OpenAI’s SEC filing signaling comes one week after rival Anthropic confidentially submitted paperwork for its own IPO. Together, both firms are preparing to test whether public investors are willing to support trillion-dollar valuations for AI firms. Analysts say OpenAI’s decision is a direct response to Anthropic’s filing, with the latter still reeling after a “monster funding round.” Previously, Anthropic raised $65 billion in a funding round that pegged its valuation at a staggering $965 billion. Despite Anthropic’s perceived first-mover advantage, traders on Polymarket and Kalshi are predicting OpenAI to file for an IPO before the Claude maker. Apart from the race to the finish, several analysts are tipping OpenAI to command a higher stock price than Claude, running into $1 trillion. Analysts are hinging their predictions on OpenAI's disclosure of generating $2 billion in monthly revenue and the sheer pace of its growth. Meanwhile, the resolution of the case revolving around OpenAI’s nonprofit roots will add to the growing tailwinds for the AI company. If OpenAI’s bid succeeds, it will put it in an elite class of trillion-dollar companies, rubbing shoulders with Nvidia, Apple, Alphabet, Microsoft, and Amazon. Meanwhile, SpaceX is hurtling toward its IPO, targeting a fixed share price of $135 that will value the company at $1.75 trillion.