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OpenAI Could IPO At A Trillion Dollars
Minting money // Image by Kait Cunniff with DALL-E
OpenAI is preparing to go public within the next 18 months at a $1 trillion valuation, which would make it the largest IPO ever.
Why It Hits: The AI race is really a race about spending — and, boy, are the tech giants burning through unprecedented amounts of cash to stay ahead. So much so that investors are starting to get nervous about just how many zeros are on those checks. OpenAI knows it needs to raise serious money not only to realize its ambitious goals but also to actually turn a profit.
Behind The Bell: Now that OpenAI — already the world’s largest private company with a $500 billion valuation — has officially transitioned into a for-profit entity (technically, a for-profit public benefit corporation), it’s ready to really Sora (sorry, we had to).
The company plans to file with regulators in the second half of next year, aiming for a late 2026 or early 2027 IPO.
It hopes to raise at least $60 billion — roughly 3x its expected annual revenue by year’s end.
The move would give investors such as SoftBank, Thrive Capital, Microsoft, and Abu Dhabi’s MGX a major windfall.
Final Trade: It’s easy to imagine CEO Sam Altman watching Nvidia cross a $5 trillion market cap on Wednesday and telling his investors to hold his beer. The AI market is in a frenzy — whether it’s a bona fide boom or an inflated bubble is still up for debate. Altman, who has taken Silicon Valley’s move-fast-and-break-things ethos to the extreme, envisions pouring trillions into global data centers and expanding ChatGPT, Sora, and future products into everyday life.
But to get there, he admitted, “eventually we need to get to hundreds of billions a year in revenue, and we’re on a pretty steep curve toward that.”
Future Valuation: Expect Sam Altman — who famously holds no direct equity in the company — to renegotiate his contract ahead of the IPO to make sure he’s very, very well-rewarded.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.