OpenAI is preparing to file for an IPO in the coming weeks

[SAN FRANCISCO] OpenAI is preparing to file for an initial public offering in the coming weeks and is targeting a public debut sometime in the fall, according to a source familiar with the plan.

The ChatGPT creator is working with Goldman Sachs and Morgan Stanley to make a confidential IPO filing as soon as Friday (May 22), but the exact timing remains uncertain, the source said, asking not to be identified because the information is not public.

OpenAI said in a statement: “We regularly evaluate a range of strategic options. Our focus remains on execution.”

OpenAI has been laying the groundwork to go public as soon as this year as part of a broader effort to raise more capital and pay for its costly push for more chips, data centres and talent, Bloomberg News has previously reported. Rivals Anthropic PBC and SpaceX are also preparing for listings. SpaceX’s IPO paperwork may be made public as soon as Wednesday.

Goldman Sachs and Morgan Stanley declined to comment. The Wall Street Journal reported on OpenAI’s IPO filing plans earlier on Wednesday. Reuters had reported in October that the IPO could value the company at as much as US$1 trillion.

OpenAI eliminated an overhang to its IPO plans earlier this week when a jury shot down Elon Musk’s lawsuit against the company and co-founder Sam Altman. Musk, an early investor in OpenAI, had claimed that the company under Altman’s leadership betrayed its mission to benefit the public by morphing into a for-profit business. A jury ultimately rejected his case, finding that he waited too long to sue the company.

Still, OpenAI faces a number of challenges in the run-up to a possible public offering. The company is confronting heightened competition from the likes of Anthropic and Google. It reportedly missed certain internal revenue and user growth targets. And several key executives have departed or stepped back from their roles. OpenAI has also been working to streamline its sprawling product lineup.

Additionally, OpenAI faces a slew of lawsuits related to its popular chatbot, alleging a range of harms, including wrongful death. Musk, meanwhile, has vowed to continue his legal battle against the company.

Since the release of ChatGPT, OpenAI has evolved into one of the world’s most valuable and powerful AI companies. In April, the AI model developer completed a deal to raise US$122 billion from investors at an US$852 billion valuation, marking the company’s largest funding round to date by far.

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The AI developer has committed to spending more than US$1.4 trillion on physical infrastructure in the coming years to support its AI efforts. To finance those bets, OpenAI and rival Anthropic have tapped an overlapping group of venture funds and tech companies, including their cloud and chip suppliers such as Amazon.com and Nvidia. The complex web of tie-ups has sparked concerns about the fallout if the technology does not match today’s lofty expectations. BLOOMBERG