OpenAI files confidentially to prepare for an IPO

In short: OpenAI says it has filed confidential paperwork with US regulators to prepare for an IPO.

What happened

OpenAI, the company behind ChatGPT, said it has submitted a draft IPO filing to the US Securities and Exchange Commission. An IPO, short for initial public offering, is when a company first sells shares to the public on a stock market.

OpenAI filed “confidentially,” which means it can start the process without sharing all the details right away. Think of it like applying for a loan and talking through numbers with the bank before you publish them for everyone to see. Because of this, OpenAI did not say how many shares it plans to sell or what price it would ask.

The move comes a little more than a week after Anthropic, a major OpenAI rival, also filed to go public. That timing adds to a sense of a race between the two companies to reach the public markets first.

TechCrunch also reported that OpenAI was last valued at $852 billion in a private funding round. The company has huge costs tied to building and running AI systems, including spending on data centers, which are large buildings packed with computers.

Why it matters

If OpenAI does go public, everyday investors could eventually buy shares, and the company would have to disclose more about its finances and risks. It also puts a spotlight on how expensive today’s AI products can be to run, even when they have hundreds of millions of users.

Source: TechCrunch AI