OpenAI eyes $850bn IPO valuation

OpenAI is preparing to confidentially file draft paperwork for an initial public offering as soon as Friday, according to CNBC, a move that would push the ChatGPT maker toward one of the largest stock market debuts on record. Goldman Sachs and Morgan Stanley are advising on the filing, CNBC said, citing a source familiar with the matter. (cnbc.com) The company’s latest private financing, completed on March 31, valued OpenAI at $852 billion. An OpenAI representative told CNBC the company’s focus “remains on execution.” A filing would bring a closely held company that has raised capital on private markets at extraordinary scale into the U.S. public disclosure system. (economictimes.indiatimes.com) It would also come days after OpenAI defeated Elon Musk’s lawsuit over the company’s shift from its original nonprofit structure, removing one immediate legal challenge as it prepares for a possible listing. (finance.yahoo.com) Reuters reported on May 18 that a U.S. jury ruled against Musk and found OpenAI not liable on his claims. ### How close is OpenAI to the market now? CNBC reported on May 20 that OpenAI was preparing to confidentially submit a draft prospectus to the Securities and Exchange Commission as soon as Friday. The outlet said bankers had been working on the document and that a public debut could come as early as September, though timing remained fluid. (cnbc.com) A confidential filing would allow OpenAI to begin the SEC review process without immediately publishing its full registration statement. U.S. issuers commonly use that route to test timing and investor appetite before making detailed financial disclosures public. ### What number is anchoring the IPO talk? OpenAI said on March 31 that it closed a $122 billion funding round at a post-money valuation of $852 billion, according to CNBC. (msn.com) That private-market price is the clearest benchmark for current IPO speculation and closely matches reports that the company could seek a public valuation near $850 billion. The financing underscored how much money investors have already committed before any public listing. (cnbc.com) Bloomberg reported the round was intended to support spending on chips, data centers and talent as OpenAI expands its infrastructure and products. ### What do the latest revenue figures show? (cnbc.com) The Information, cited by Economic Times on May 22, said OpenAI generated about $5.7 billion in first-quarter revenue, roughly $1 billion more than Anthropic. That figure adds a current operating metric to a story that had largely been driven by private valuations and fundraising. (cnbc.com) The same report said Anthropic was still growing rapidly, underscoring that investors would likely measure OpenAI not only against software companies but also against a direct AI rival with its own path to the capital markets. (bloomberg.com) ### What scrutiny would an IPO bring? Reuters reported from Oakland, California, on May 18 that Musk’s lawsuit challenged OpenAI’s move away from its founding nonprofit mission. Although the jury ruled for OpenAI, the case aired details about the company’s structure and leadership in open court just as IPO preparations accelerated. (economictimes.indiatimes.com) Bloomberg Law reported last week that state attorneys general asked the SEC to carefully vet any OpenAI public offering, saying controversy around the company could affect public pension investors. That means any registration statement is likely to draw close attention from regulators, investors and political critics. (economictimes.indiatimes.com) ### What has OpenAI said publicly? An OpenAI representative told CNBC that, “As part of normal governance, we regularly evaluate a range of strategic options,” and added that the company’s focus “remains on execution.” The company has not publicly announced an IPO filing or published a prospectus. September is the earliest public debut window cited in current reports, with Goldman Sachs, Morgan Stanley, the SEC review process and OpenAI’s eventual filing expected to determine whether that timetable holds. (msn.com) (finance.yahoo.com) (europesays.com) (news.bloomberglaw.com)