OpenAI files for IPO as AI firms look to make Wall Street debut

ChatGPT maker OpenAI filed preliminary paperwork that would open the door to it becoming a publicly traded company, the third in a powerhouse trio of artificial intelligence companies racing to Wall Street debuts.

The San Francisco-based company said Monday it has filed confidential paperwork with the U.S. Securities and Exchange Commission.

“We expect it to leak so we’re just announcing it,” the company said in a statement. “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.”

OpenAI’s move follows its rival Anthropic’s June 1 disclosure that it is also moving toward an initial public offering of shares. Both are now following Elon Musk’s rocket company SpaceX, which has started an IPO roadshow pitching itself as an AI-focused space company.

OpenAI CEO Sam Altman first publicly floated the possibility of an IPO last fall, describing it as the “most likely path” for the company given its size and the need for vast amounts of capital to advance its technology.

OpenAI began in 2015 as a nonprofit dedicated to developing AI for the common good and is now a company valued at $852 billion US.

The filing comes at a “precarious moment” for OpenAI as it appears to be losing ChatGPT’s strong early leads with consumers and businesses to Google and Anthropic, said Emarketer analyst Nate Elliott.

“OpenAI doesn’t have a lot of other places to look for the enormous capital required to support its costs,” Elliott said.

Paving the way for going public was OpenAI’s decision last year to reorganize its business structure and convert itself into a public benefit corporation even as it remains technically under the control of a nonprofit.

OpenAI cleared another obstacle last month with its victory against Musk in a federal jury trial. Musk, an OpenAI co-founder and early donor, had sued the company seeking to oust Altman from its leadership and unravel its conversion to a for-profit business. A judge dismissed the case after the jury found Musk filed his lawsuit too late.

OpenAI has not yet publicly disclosed how much money it is making or when it plans to turn a profit. Much like Anthropic and SpaceX, the company has been losing more money than it makes because of the huge costs of building out the venture. OpenAI faces fierce competition from Anthropic, maker of the…