OpenAI enters Wall Street listing race

OpenAI has confidentially filed paperwork for a US initial public offering, putting the ChatGPT maker on a possible path to one of the largest technology listings ever and intensifying the race among artificial intelligence companies to tap public markets.

The San Francisco-based company submitted a draft registration statement on Form S-1 to the US Securities and Exchange Commission, a step that allows it to begin the regulatory review process while keeping financial details out of public view. OpenAI said it had not fixed a timetable for a listing, signalling that a flotation remains an option rather than an immediate certainty.

The move follows Anthropic’s confidential IPO submission on June 1, placing two of the most closely watched AI companies on parallel tracks towards Wall Street. Both groups have built large businesses around generative AI models, enterprise software and cloud-based services, but they also face heavy spending requirements, regulatory pressure and investor scrutiny over the economics of advanced AI.

OpenAI’s filing comes after a renegotiation of its relationship with Microsoft, its long-standing strategic backer. The revised arrangement gave OpenAI greater flexibility to pursue infrastructure and commercial partnerships beyond Microsoft’s cloud platform, including arrangements involving Amazon, Google, Nvidia and other technology groups central to the AI supply chain.

Microsoft first invested in OpenAI in 2019 and later deepened the relationship through multi-billion-dollar commitments tied to Azure computing capacity and product integration. That partnership helped OpenAI scale ChatGPT, enterprise tools and developer services, while giving Microsoft a lead in embedding generative AI across its software portfolio.

The IPO filing suggests OpenAI is preparing for a future in which capital requirements could exceed what private fundraising alone can comfortably provide. Training and running frontier AI models requires enormous spending on graphics processors, data centres, networking equipment, electricity and specialised engineering talent. Public markets could provide fresh capital, employee liquidity and a clearer valuation benchmark for the wider sector.

OpenAI’s private valuation has climbed sharply since the launch of ChatGPT in late 2022. The company has been valued in the hundreds of billions of dollars through private financing rounds, reflecting investor expectations that generative AI will reshape software, search, advertising, education, healthcare, finance and industrial operations.

Anthropic, founded by former OpenAI employees, has emerged as OpenAI’s most direct rival in enterprise AI. Its Claude models have attracted corporate customers and major backing from Amazon and Alphabet. Its IPO filing placed it ahead of OpenAI in the formal queue for a public-market debut, although neither company has committed to a listing date.

The filings mark a change in the AI funding cycle. Until now, the largest AI developers relied heavily on strategic investors, sovereign funds, venture capital and cloud providers. A public listing would expose their revenue growth, losses, customer concentration, computing commitments and governance structures to wider scrutiny.

OpenAI’s corporate structure will draw particular attention. The company began as a non-profit research organisation in 2015 before adopting a capped-profit model to raise the capital needed for large-scale AI development. That structure has been the subject of internal debate, outside criticism and litigation, with questions focused on how OpenAI balances commercial expansion with its stated mission to build beneficial artificial general intelligence.

The company is also entering public-market preparations at a time when policymakers are examining AI safety, copyright, data use, competition and national security risks. Governments in the US, Europe and Asia are moving to regulate high-capability AI systems, while courts are considering claims over training data, intellectual property and platform liability.

For investors, OpenAI’s listing would offer exposure to one of the best-known names in artificial intelligence, but it would also require confidence in a business model still shaped by high costs and rapid technological change. Revenue from subscriptions, developer tools and enterprise products has expanded quickly, yet the cost of computing infrastructure remains a central challenge.

Competition is widening beyond model quality. OpenAI, Anthropic, Google DeepMind, Meta, xAI and other developers are racing to secure chips, cloud capacity, data partnerships and enterprise distribution. Large customers are also testing multi-model strategies to avoid dependence on a single provider.

A public OpenAI would face quarterly reporting expectations that private companies can avoid. Management would have to explain spending plans, model-release strategy, safety procedures and partnership economics to investors who may be less patient with long-term research commitments than private backers.