According to multiple media reports, ChatGPT developer OpenAI plans to confidentially submit its initial public offering (IPO) application in the coming weeks, with the goal of going public as soon as September this year. This news follows closely after SpaceX — Elon Musk’s space exploration company filed its confidential documents in April and may enter the public market as early as June.
OpenAI’s IPO plans are expected to attract significant attention. The company not only sparked the artificial intelligence boom but also remains regarded as one of the industry’s leaders. It maintains close partnerships with top chipmakers such as Nvidia (NVDA) and AMD (AMD), both of which, along with several other tech giants, hold stakes in the startup.
As OpenAI decides to go public, Anthropic — the AI startup behind the chatbot Claude — has evolved from a challenger in the industry race two years ago into what could be considered a current leader. Anthropic is now in talks for a new funding round at a valuation between $900 billion and $950 billion, a figure that would surpass OpenAI’s valuation of $852 billion from its latest funding round in March.
Beyond surpassing OpenAI in valuation, Anthropic also appears to be growing faster. The company expects its first-quarter revenue to grow from $4.8 billion to $10.9 billion in the second quarter, more than doubling. In comparison, OpenAI achieved an annualized revenue of $25 billion in March, a 17% increase from the beginning of the year. If this growth rate holds, based on second-quarter revenue, Anthropic would overtake OpenAI.
At the same time, OpenAI faces severe financial pressure. The company is pouring substantial funds into the technological infrastructure required to run its AI models. According to an April report by The Wall Street Journal, OpenAI has failed to meet key revenue and user targets, and if its growth is not fast enough, it could struggle to meet its commitments to pay for data center capacity.
Currently, OpenAI has approximately $600 billion in future spending commitments, and the company forecasts that cash flow losses will continue until 2030. Although estimates of its cumulative cash burn vary, the figure has already reached hundreds of billions of dollars.
Companies can go public from a position of strength or weakness. While OpenAI remains a giant, its current situation is fragile: its market share is being eroded by Anthropic, and it continues to burn cash to execute its business plan. This seems to explain why it is choosing to go public now — the company needs capital. In the private market, its valuation is unlikely to rise significantly unless its technology can surpass Anthropic’s. At the same time, investors and insiders need an exit path.
Although there is a lack of detailed financial information to fully assess OpenAI’s IPO prospects, based on the current situation, this decision appears to be driven more by industry dynamics and the company’s own cash burn. That is not a good sign for an IPO that could be valued at $1 trillion or higher.
Summary: OpenAI’s IPO plan seems like a major event in the AI field, but the underlying motives are rooted more in competitive pressure and financial difficulties. Faced with Anthropic’s rapid rise and its own persistent cash burn, OpenAI’s decision to go public at this time stems more from real funding needs than from strategic strength. Investors eyeing this high-valuation IPO should carefully evaluate the company’s cash flow performance and competitive landscape in the coming years.
