OpenAI targets September IPO as legal clarity clears path for $730 billion listing
Valued at $730 billion, the artificial intelligence firm reports a $5 billion net loss in 2024 and faces a multi-year path to profitability, with experts predicting cumulative losses of $44 billion by 2028.
OpenAI is preparing to file for an initial public offering as early as September, following a federal jury’s decision to side with chief executive Sam Altman in a high-profile legal dispute with co-founder Elon Musk. According to reporting by The New York Times, the company has been in discussions with investment banks Goldman Sachs and Morgan Stanley to facilitate the filing. Insiders indicate that OpenAI is closely monitoring stock market conditions to determine the optimal timing for the listing.
The potential public listing comes after a significant legal hurdle was removed. A federal judge and jury rejected a lawsuit filed by Musk that threatened to unravel the structure of OpenAI’s for-profit arm. The company has responded to the reporting with a statement emphasising "normal governance," noting that it regularly evaluates strategic options while maintaining its focus on execution.
Financially, the company presents a complex picture for investors. OpenAI is valued at $730 billion following its latest funding round, a valuation driven significantly by investments from technology giants such as NVIDIA and Microsoft. However, the firm reported a net loss of $5 billion in 2024 against $3.7 billion in revenue, highlighting a substantial gap between spending and income.
CEO Sam Altman has committed to spending $600 billion on computing infrastructure by 2030. This massive capital expenditure plan has led experts to predict that OpenAI could face cumulative losses of $44 billion by 2028. Profitability is not expected to arrive until 2029 or 2030, a timeline that some analysts view as lengthy for a company of its stature.
The move places OpenAI in a crowded market for major technology debuts. Rivals such as SpaceX, which owns xAI, and Anthropic have also taken steps towards going public. SpaceX’s offering could occur as soon as next month, setting the stage for a direct comparison between two major market debuts. The valuation of OpenAI has drawn scrutiny regarding circular investment, given its status as a major customer for NVIDIA and its long-standing exclusive cloud partnership with Microsoft.
