OpenAI, the company behind ChatGPT, has made a confidential filing with the US Securities and Exchange Commission to pursue an initial public offering at some point in the future. The company said it has not decided on timing yet, adding that it “may be a while” because some steps are likely easier as a private company. The move came exactly one week after Anthropic said it was planning to go public, too, setting up a new contest between two leading generative Artificial Intelligence firms.
The plans are part of a broader wave of heavyweight IPOs that includes Anthropic and Elon Musk’s SpaceX, which is set to debut on the Nasdaq on Friday. SpaceX is targeting a share price which would value the company at $1.75tn (£1.3tn). Sunil Krishnan of Aviva Investors said the firms all have a “vast need for cash” and that “no-one wants to be last” in going public, pointing to the huge expense of chips, Artificial Intelligence infrastructure and model training.
OpenAI and Anthropic compete for users, corporate customers and investors. Dario Amodei co-founded Anthropic five years ago after leaving OpenAI over disagreements with Sam Altman, OpenAI’s co-founder and chief executive. OpenAI’s most recent valuation from private investors came in at $852bn. Anthropic’s most recent valuation hit $965bn. Richard Crowley of Singapore Management University said their financing prospects are intertwined through the public’s perception of the generative Artificial Intelligence market.
Going public would likely give OpenAI, Anthropic and SpaceX access to billions of dollars in capital, but it would also require greater transparency around financials and product pipelines. Crowley said IPO listings can deter private funding and make deals slower or less appealing because companies must disclose more information. One of the most costly aspects of running an Artificial Intelligence company is compute, the infrastructure and processing power required to build, train, test and provide services such as chatbots. OpenAI’s compute costs are estimated to be over $100bn a year, while its revenue, the money it actually makes from its business, is a fraction of that. Anthropic has told investors that it expects to turn a profit in the first half of this year as Claude sales and related services have grown significantly.
