OpenAI, the creator of ChatGPT, has confidentially submitted paperwork for an Initial Public Offering (IPO), as announced in a company blog post on Monday. This move closely follows its primary competitor, Anthropic, which also filed to go public just over a week prior, intensifying the competitive landscape between the two prominent artificial intelligence companies.
With a post-money valuation most recently pegged at $852 billion, OpenAI has submitted a confidential draft registration statement to the U.S. Securities and Exchange Commission (SEC) for its proposed IPO. At this preliminary stage, the company has not yet disclosed the number of shares to be offered or the target price.
This confidential filing further suggests that 2026 is shaping up to be a landmark year for public market debuts, with Elon Musk's SpaceX also anticipated to enter the market with an estimated valuation of $1.75 trillion.
OpenAI's pursuit of an IPO comes amidst reports from The Wall Street Journal indicating that the company recently fell short of its internal targets for user growth and revenue. Chief Financial Officer Sarah Friar reportedly voiced concerns regarding OpenAI's ability to sustain its substantial expenditures on data centers, pointing to a considerable burn rate.
In late March, OpenAI completed a monumental funding round, securing $122 billion — the largest in Silicon Valley's history, with $3 billion directly contributed by retail investors through banking channels. However, The Wall Street Journal reports that the company projects spending the entirety of this sum on computing power for AI research by 2028. Furthermore, it anticipates a burn of $85 billion that year, even after doubling its sales from the previous year, and does not foresee achieving positive cash flow until 2030.
While not as extensive, SpaceX's expenditures on AI similarly highlight the significant challenge where the costs associated with training large language models can often surpass the revenue generated by these very models.
Conversely, Anthropic has offered investors a more optimistic financial outlook, stating it is nearing its first quarterly profit. Despite this, with a recent $65 billion funding round and an additional $36 billion in chip-allocated debt potentially on the horizon, Anthropic's own burn rate cannot be considered modest.
The confidential nature of the IPO filing enables OpenAI to commence its preparations for a public offering without the immediate requirement of publicly disclosing comprehensive financial details or business risks. This is why the company has yet to release stock pricing or specify the amount it aims to raise. Nevertheless, secondary markets offer an early indication of investor appetite and valuation expectations.
On Forge Global, a retail secondary market platform, Anthropic recently saw its valuation soar to $1 trillion, thereby surpassing OpenAI, which was recorded at approximately $880 billion in April.
David Shapiro, founder and CEO of OpenVC, who also oversees the NYSE OpenVC 500 Index tracking the largest public and private U.S. companies, noted that Anthropic's year-to-date appreciation rate of 123% significantly outpaces OpenAI's 11.3%. However, he clarified that despite Anthropic's notable surge, OpenAI continues to attract considerable interest in the secondary market.
"From a secondary investor standpoint, OpenAI had already grown into a significant portion of its valuation," David Shapiro, founder and CEO of OpenVC and overseer of the NYSE OpenVC 500 Index, informed TechCrunch. He added, "We haven’t seen OpenAI crater or anything close, and valuation is still enormously successful, according to the index."
Shapiro further observed that OpenAI's stock in the secondary market "experienced a slight pop over the last few days," suggesting that investors might be valuing both companies as "dual winners" in the overarching race for large language models.
Nevertheless, the urgency to be the first to enter the public markets remains a critical factor. Experts suggest that the company making its public debut first is likely to secure a larger share of the increasingly limited capital available for AI firms, especially given that a significant portion is expected to be allocated to SpaceX, which is projected to complete its IPO before the other two.
Moreover, a recent PitchBook report, which assessed OpenAI as overvalued relative to its underlying fundamentals, indicates that Anthropic's eventual filing disclosures will establish a valuation benchmark that could restrict how OpenAI prices its own offering when it formally files.
Founded in 2015 as a nonprofit research laboratory, OpenAI profoundly disrupted the artificial intelligence landscape with the release of ChatGPT in 2022, thereby initiating a widespread wave of large language model advancements across the entire industry.
While OpenAI has broadened its product offerings to cater to both enterprise and government clients, the firm maintains a strong reputation for being more consumer-centric compared to its competitor, Anthropic. The company has achieved substantial scale, boasting approximately 900 million weekly active users.
This IPO initiative follows a period of significant internal turmoil within the company. In 2022, OpenAI's board controversially ousted CEO Sam Altman, citing concerns over a lack of transparency and trust in his commitment to the firm's founding mission of benefiting all humanity. Altman was swiftly reinstated, and key figures involved in the attempt to remove him, including co-founder Ilya Sutskever, subsequently departed.
More recently, OpenAI has been embroiled in several legal challenges, including a lawsuit filed by the state of Florida. This complaint accuses the company and CEO Sam Altman of endangering children by allegedly providing information to school shooters, offering guidance on self-harm, and fostering addiction among young users. Florida's suit is among a growing number of legal actions brought against OpenAI and other chatbot developers following incidents involving user delusions, self-harm, suicide, and mass casualty events.
Last month, OpenAI faced legal proceedings stemming from a lawsuit filed by Elon Musk, a co-founder and now competitor, who alleged that the company and Altman breached an original promise to maintain OpenAI as a nonprofit entity. The case was ultimately dismissed after a jury and judge determined that Musk had filed the lawsuit in 2024 beyond the applicable statute of limitations.
OpenAI has also drawn criticism following revelations that its president, Greg Brockman, and his wife each contributed $12.5 million to "Leading the Future," a pro-AI Political Action Committee (PAC) focused on counteracting local politicians who advocate for AI regulation. They also made comparable donations to MAGA Inc., a pro-Trump super PAC. OpenAI has since sought to distance itself from these contributions, characterizing them as its president's "personal" donations and asserting that no company funds were involved.
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