OpenAI Just Filed for an IPO and Wall Street Is Watching

OpenAI confidentially filed for an initial public offering on Monday (June 8), signaling a long-anticipated move toward Wall Street. The decision sets up a high-stakes public debut that investors will watch as a test of the AI boom.

According to a statement OpenAI posted on X, the company submitted a confidential S-1 to the Securities and Exchange Commission. The company said it announced the step because it expected the filing to leak anyway.

OpenAI added that it had not decided on timing and that a public listing may still be a while away. The company said some plans are easier to pursue as a private firm, calling the choice a complicated set of trade-offs.

Filing confidentially means the prospectus and financial details stay private for now. That differs from a public filing, where investors can review a company's financial information directly.

The move comes exactly one week after rival Anthropic said it was also planning to go public, per the BBC. Both companies have been fierce competitors since Dario Amodei left OpenAI to co-found Anthropic five years ago.

According to the BBC, OpenAI's most recent private valuation reached $852bn. Anthropic's most recent valuation hit $965bn, with both firms pushing toward the $1tn mark.

The two now compete over who might reach the public market first. Neither company has said exactly when a listing could happen, the BBC reported.

Why the costs matter

Running an AI company is expensive, driven mainly by the compute needed to train and serve large models. The BBC reported that OpenAI's compute costs are estimated at over $100 billion a year, far above its revenue.

Anthropic, by contrast, has told investors it expects to turn a profit in the first half of this year. The BBC reported that sales of its Claude product and related services have grown significantly.

According to CNET, some reports say OpenAI's partners and infrastructure backers have taken on roughly $96 billion in debt. Some estimates put its long-term compute and energy commitments near $1.4 trillion.

Going public would expose OpenAI to scrutiny over its high operating costs and lack of profitability. It would also bring greater regulatory oversight and potential legal, privacy, or copyright challenges, CNET reported.

The IPO will be closely watched as investors weigh whether warnings about an AI bubble prove correct. CNET noted that Sam Altman himself has raised such concerns about the market.

An online tracker cited by CNET shows AI development has cost more than twice what it has generated so far. That gap suggests billions of dollars in debt across the broader industry.

If it lists, OpenAI would join a slate of high-profile IPOs expected this year. According to the BBC, SpaceX is set to debut on the Nasdaq on Friday at a valuation the company expects to reach $1.75tn.

The race could serve as a broader stress test for the AI industry's business model. After going public, each firm must report its business performance to investors every quarter.