OpenAI files confidential SEC paperwork for IPO, opening the door to a Wall Street debut

ChatGPT maker OpenAI filed preliminary paperwork that would open the door to it becoming a publicly traded company, making itself the third in a powerhouse trio of artificial intelligence companies racing to Wall Street debuts.

The San Francisco-based company said Monday it has filed confidential paperwork with the U.S. Securities and Exchange Commission.

“We expect it to leak so we’re just announcing it,” the company said in a written statement. “We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”

OpenAI's move follows its rival Anthropic's June 1 disclosure that it is also moving toward an initial public offering of shares. Both are now following Elon Musk's space company SpaceX, which has started an IPO roadshow pitching itself as an AI-focused space company.

OpenAI CEO Sam Altman first publicly floated the possibility of an IPO last fall, describing it as the “most likely path” for the company given its size and the need for vast amounts of capital to advance its technology.

OpenAI began in 2015 as a nonprofit dedicated to developing AI for the common good and is now a company valued at $852 billion.

Paving the way for going public was OpenAI’s decision last year to reorganize its business structure and convert itself into a public benefit corporation even as it remains technically under the control of a nonprofit.

In an April interview, OpenAI’s chief financial officer Sarah Friar declined to give a timeline for a potential IPO but said the company was already “acting with the good hygiene of a public company,” such as by measuring its revenue in the way a publicly traded firm would have to report earnings to the SEC.

“I want us to be ready,” she told The Associated Press. “I think it’s good to be able to tap the public markets. They’re much bigger than the private markets if you believe compute is a competitive advantage.”

She said OpenAI’s current valuation would make it one of the 15 biggest companies in the S&P 500.

She also said there is a “credentializing moment of being a public company.”

“At that point, people are checking your balance sheet, the SEC is governing you and so on,” she said.