Summary
- OpenAI is preparing an IPO in the fourth quarter of this year and is holding informal talks with major Wall Street investment banks, according to the report.
- OpenAI is valued at about $500 billion and is pursuing pre-IPO fundraising of more than $100 billion, the report said.
- With no stable cash-generating business, whether it can raise capital through a timely IPO is expected to be a pivotal factor in its future business strategy, the report said.
A report has emerged that ChatGPT developer OpenAI is preparing an initial public offering (IPO) in the fourth quarter of this year. If it does proceed with a listing, it is expected to be a mega-IPO representing the artificial intelligence (AI) industry.
According to The Wall Street Journal (WSJ) on the 29th (local time), OpenAI is said to be holding informal talks related to an IPO with major Wall Street investment banks. It has also moved to bolster its finance organization, including efforts to appoint a chief accounting officer (CAO) and a chief business and finance officer (CBFO). The WSJ reported that this is “being interpreted as internal preparatory work for a potential listing moving into full swing.”
OpenAI is currently one of the world’s largest private companies, valued at about $500 billion. It is pursuing large-scale fundraising of more than $100 billion. This has the character of pre-IPO equity financing. In this round, Japan’s SoftBank is reportedly considering a $30 billion investment, and Amazon is said to be in talks with OpenAI on investing about half of the target amount—$50 billion.
OpenAI’s push toward an IPO is also said to be driven by a desire to keep a rival, Anthropic, in check. Citing sources, the WSJ reported that “OpenAI’s management has been concerned that Anthropic could move to an IPO before it does.” Anthropic is accelerating toward an IPO as it raises investment exceeding its initial $10 billion target. It is also said to have told Wall Street that it is keeping open the possibility of a listing by the end of this year.
Unlike established big tech companies such as Google and Meta Platforms, OpenAI lacks a stable cash-generating business. With massive costs poured annually into the development and operation of large AI models, whether it can raise funding through a timely IPO is expected to become a pivotal factor in its future business strategy.
Sam Altman, CEO of OpenAI, said on a podcast last month, “If you ask me personally whether it’s good to become the head of a public company, I’d say ‘0%,’” adding that “there are aspects of OpenAI becoming a public company that could be exciting, but on the other hand it would be extremely annoying.”
Reporter Kim Dong-hyun 3code@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
