OpenAI Initiates IPO Process... Intense Competition Begins Among AI Companies for Public Listings

Anthropic Goes First, OpenAI Targets Fall Listing
The Race for Capital Intensifies in the AI Industry

Following Anthropic, OpenAI has joined the ranks of companies preparing for an initial public offering (IPO). As a result, the race for performance in the generative artificial intelligence (AI) industry has now expanded into a battle for funding.

Reuters Yonhap News

On June 8 (local time), OpenAI, the developer of ChatGPT, announced that it had confidentially submitted a draft registration statement (S-1) for an IPO to the U.S. Securities and Exchange Commission (SEC).

◆Confidential IPO Filing with the SEC= OpenAI disclosed this information through its official website, stating, "We have not yet determined the timing for listing," and added, "There are certain advantages to remaining a private company, so it may take some time." The company further explained, "Given the complex web of pros and cons, this filing is intended to give us the option to list more quickly if necessary." Foreign media outlets have reported that OpenAI has selected Goldman Sachs and Morgan Stanley as lead underwriters, aiming to go public as early as this fall.

OpenAI recently submitted its IPO documents confidentially, following the lead of other U.S. tech companies. This process allows the company to avoid disclosing financial information and business details to the public while the SEC conducts its preliminary review of the IPO. SpaceX, which is going public this week, and Anthropic, which is planning an IPO in the second half of this year, have also filed confidentially. The Financial Times (FT) analyzed that by submitting IPO documents confidentially, companies are not required to disclose financial information, such as revenue and losses, during the SEC review process. This enables them to gauge investor demand first, revise their filings as needed, or withdraw their IPO plans without much attention if market conditions are unfavorable.

However, there have recently been growing questions in the market regarding OpenAI's investment profitability. Bloomberg recently reported that OpenAI has failed to meet some of its internally set targets for revenue and user growth. As of February, OpenAI’s annualized revenue reached 25 billion dollars. However, it is believed the company fell short of its goals due to the burden of large-scale investments and intensifying competition.

Recently, OpenAI, through products such as ChatGPT, has been fiercely competing for market share against Anthropic’s Claude and Google’s Gemini. At the same time, several key executives have left or stepped back from frontline roles at OpenAI. The company is also in the process of streamlining an overly expanded product lineup.

The Wall Street Journal (WSJ) pointed out that if OpenAI pushes ahead with listing, it will need to convince investors that its revenue can grow rapidly enough to handle hundreds of billions of dollars in computing contracts signed through 2030. In February, OpenAI informed investors of plans to invest approximately 600 billion dollars in AI infrastructure by 2030. According to investment information provider Tracxn, OpenAI has raised a cumulative 180 billion dollars across multiple investment rounds to date. One foreign media outlet predicted that, should OpenAI succeed in its IPO, it could raise over 60 billion dollars.

◆Capital Raising Scale Exceeds 60 Billion Dollars= The company’s valuation is expected to surpass 1 trillion dollars through the IPO. OpenAI’s valuation was around 1 billion dollars in 2019. It increased to about 29 billion dollars in 2023, surpassed 500 billion dollars last year, and soared to 852 billion dollars as of March this year.

The market believes that whether OpenAI or Anthropic goes public first could influence investor sentiment and disclosure strategies. Harrison Rolfes, an analyst at investment research firm PitchBook, told Axios, "If Anthropic discloses detailed information first, OpenAI may adjust its disclosure strategy in response."

With SpaceX, Anthropic, and OpenAI all moving forward with IPO procedures, there are projections that the amount of capital absorbed by the U.S. stock market this year could reach historic levels. SpaceX is expected to raise 75 billion dollars through its IPO. Anthropic is also projected to secure about 50 to 60 billion dollars in funding. Including OpenAI, the combined estimated IPO proceeds for the three companies could approach 190 billion dollars.

This content was produced with the assistance of AI translation services.