For creators and developers relying on these systems, the shift from private to public ownership signals a fundamental change in how AI tools are funded and governed. While the immediate impact on chatbots and image generators remains opaque, the move suggests that the companies building the infrastructure behind your work are preparing for a level of scrutiny and capital allocation previously unseen in the sector. The prospect of a public listing for OpenAI could alter the incentives driving model development, potentially prioritising shareholder returns alongside the “public benefit” mission that currently guides the organisation.
A Trillion-Dollar Gamble
OpenAI has submitted confidential documentation for an initial public offering, initiating a potentially lengthy journey toward listing on a US stock exchange. This marks the third major filing this year for what analysts estimate could be a trillion-dollar valuation. The appetite for such massive capital injections is driven by tech giants like Alphabet, Amazon, Meta, and Microsoft, all of which are competing fiercely for the resources required to expand data centres and recruit top-tier talent.
Going public would provide OpenAI with another avenue to raise funds, following a private fundraising round in March that brought in $122 billion. Public listing could also serve to boost employee morale and customer trust by increasing transparency around the business’s financial health, a crucial factor as the company attempts to reassert its dominance as the clear leader in frontier AI.
The company has not yet revealed a specific timeline or the amount of capital it intends to raise. In a brief, unsigned blog post, OpenAI stated: “We recently submitted a confidential S-1… We expect it to leak so we’re just announcing it. We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”
By having the paperwork ready, OpenAI may be positioning itself to capitalise on a potentially successful debut by its rival, Anthropic. Should Anthropic encounter regulatory or market hurdles, OpenAI retains the flexibility to hold off and recalibrate its strategy.
The Three-Way Race
Anthropic, founded in 2021 by former OpenAI staff, filed its confidential IPO paperwork on June 1. Just prior to this filing, Anthropic secured a fundraising round that valued the company at $965 billion, surpassing OpenAI’s $852 billion valuation. Both figures represent record-breaking valuations in the venture capital world. Elon Musk’s SpaceX, which develops rockets, sells satellite internet, and builds advanced AI models, publicly filed for its own IPO last month.
These filings could value each company at over $1 trillion, despite none of them currently being profitable and generating roughly 80 to 90 percent less revenue than nearly every existing public trillion-dollar firm. The only IPO to breach the $1 trillion mark was Saudi Aramco in 2019.
OpenAI’s revenue from subscriptions, advertising, and service fees is estimated to have grown between $10 billion and $20 billion last year. However, the company has spent significantly more on cloud computing and personnel, resulting in billions in losses. Recently, the organisation has undergone several restructurings due to executive health issues and a strategic pivot to focus on fewer projects.
Internal debates have raged over whether the company is truly ready for a public listing. According to sources familiar with the matter, OpenAI once targeted an IPO for late 2027 or early 2028. Last week, President Donald Trump indicated his administration would consider the possibility of the US government taking a stake in AI companies as they go public. OpenAI has explored this concept to broaden the public benefits of AI development. A blog post co-authored by CEO Sam Altman emphasised that “a good AI future” requires that “many people, companies, communities, and countries can build, benefit, and hold power.”
Legal and Structural Hurdles
OpenAI established a for-profit subsidiary in 2019 to enable fundraising beyond what donations would allow. Today, the original nonprofit owns roughly 25 percent, or more than $200 billion, of the company. It retains the power to block major business decisions and remove executives, making any structural changes legally complex.
Recently, OpenAI cleared a significant obstacle by defeating a lawsuit from Musk, who accused the ChatGPT-maker of straying from its nonprofit mission. A federal judge and jury dismissed Musk’s claims last month, ruling that the lawsuit was filed too late.
However, OpenAI’s structure remains under ongoing scrutiny from California and Delaware regulators. This month, the California attorney general’s office denied a request for records of recent communications with OpenAI, citing laws that shield investigative files from public disclosure. The company will now require approval from the US Securities and Exchange Commission regarding its accounting and risk disclosures, a process that could be complicated by its unique structure.
Chris Lehane, OpenAI’s chief of global affairs, recently stated that the company will retain its structure after the IPO. As a public benefit corporation overseen by a nonprofit, he argued it can consider societal impacts without prioritising shareholder value above all else.
Public advocacy groups have been critical of OpenAI’s work, citing an “epidemic” of AI-related distress and labour experts’ concerns over catastrophic job losses. How OpenAI addresses these harms in its final prospectus will likely attract significant attention. Meanwhile, in San Francisco, where both OpenAI and Anthropic are headquartered, residents are bracing for a surge in real estate prices as employees convert paper wealth into liquid assets.
Several early employees, including president Greg Brockman and former chief scientist Ilya Sutskever, have already become multibillionaires due to their shareholdings, according to testimony given during the Musk v. Altman trial.
Key takeaways
- OpenAI has filed confidential IPO paperwork, joining SpaceX and Anthropic in a race to value companies at over $1 trillion despite current unprofitability.
- The company’s unique hybrid structure, where a nonprofit holds a massive stake, presents legal complexities that regulators in California and Delaware are closely monitoring.
- While the IPO could boost employee wealth and company transparency, it also faces intense scrutiny regarding AI safety, labour impacts, and the balance between public benefit and shareholder value.
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