OpenAI applies for IPO listing! But the rate of spending is astonishing, and it may not achieve positive cash flow within four years.

OpenAI has secretly submitted an IPO application, with a valuation reaching $852 billion. However, its rate of spending is astonishing—it's estimated that it will be unable to achieve positive cash flow within four years. Internally, the company is streamlining its product lines and restructuring its strategy in preparation for going public.

OpenAI Secretly Applies for an IPO; Listing Timeline Not Yet Set

The U.S. AI giant OpenAI, which developed ChatGPT and Codex, has officially announced that it has secretly submitted an S-1 draft registration statement for an IPO to the U.S. Securities and Exchange Commission.

In response to the decision to pursue an IPO, OpenAI later acknowledged on its official blog and social media platforms that, since it was expected that this news might leak early, it decided to disclose it proactively; however, OpenAI also emphasized that the exact listing schedule has not yet been finalized.

In its statement, OpenAI noted that because some plans are easier to execute while the company is still private, it may still take some time before it officially lists. At the same time, the secret filing allows the company to retain more flexibility. If, in the future, after evaluation, it determines that going public is the best option, it will be able to move toward the public market more quickly.

Image source: OpenAI announces IPO application; listing timeline not yet determined

According to CNBC, OpenAI CFO Sarah Friar previously said in April that for a company of OpenAI’s scale, having the company’s operations and structure “look, feel, and act” like a publicly traded company is good corporate governance. However, at the time, she did not comment on a specific IPO timetable.

OpenAI valuation is close to a trillion, but the cash burn rate is staggering

OpenAI’s IPO application comes right as the U.S. stock-market startup IPO race is heating up.

OpenAI only completed a fundraising round of up to $122 billion in March this year. At that time, its post-investment valuation was $852 billion. But its rival, Anthropic, has already secretly filed for an IPO on June 1. Data from secondary-market platform Forge Global shows that Anthropic’s recent valuation has surged to $965 billion, surpassing OpenAI.

• **Related report:**Anthropic files for an IPO! Beating OpenAI and taking over SpaceX—U.S. enters the biggest startup listing wave in history

Although OpenAI has also recently raised enormous amounts of capital, the financial pressure it faces—and its “cash burn rate”—is just as shocking.

The Wall Street Journal previously reported that by 2028, OpenAI expects its computing spend used solely for AI research to reach $122 billion, and even if revenue doubles that year, it will still face a net loss of $85 billion. In other words, this means OpenAI will be seeking investors in the public market to buy into a company that, for at least the next 4 years, will not be able to generate positive cash flow (the money it makes will not be more than what it spends).

By contrast, Anthropic has presented investors with a more optimistic financial outlook, claiming it is nearing its first quarterly profit.

OpenAI reorganizes its product strategy for the IPO

With the secret IPO submission, OpenAI’s internal operations and product strategy are also being reorganized.

OpenAI CEO Sam Altman said in a blog post that the company is entering a “third phase,” where the core issue has shifted from initial general AI (AGI) research and productization to how to make advanced AI more widespread, cheaper, safer, and more practical.

To demonstrate financial discipline ahead of the IPO, OpenAI has in recent months actively streamlined its product lines, closing off peripheral projects including the short-video app Sora App, and instead concentrating resources on the enterprise market and AI coding assistant Codex, which directly competes with Anthropic.

In addition, OpenAI is also actively seeking external alliances. Besides maintaining large-scale collaborations with Microsoft, Google, and Nvidia, it has also recently established cooperation with the Trump (Donald Trump) administration.

However, this rapid push toward going public isn’t without noise inside the company.

According to The Verge, internal sources indicate that CFO Sarah Friar is not as enthusiastic about the rapid IPO plan led by Altman as the outside world believes. The main reasons are that OpenAI has recently failed to meet internal targets for revenue and new user growth, and senior management is concerned about whether the company can afford the commitment to up to $60 billion in computing infrastructure spending.

Altman wins the case to clear obstacles; the U.S. stock market braces for a massive startup IPO wave

The news that OpenAI will apply for an IPO recently emerged after Altman finished his legal battle with Tesla CEO Elon Musk. At the time, the jury and judge ruled that the claims were barred by the statute of limitations, dismissing Musk’s allegations—allowing OpenAI to clear a major obstacle ahead of a potential listing.

However, OpenAI still faces more than 10 civil lawsuits, including allegations that ChatGPT encourages teenagers to self-harm or is involved in campus shooting cases. At the same time, the crowding-out effect from market funding is also coming to the surface.

• **Related report:**First in the U.S.! Florida sues OpenAI, accusing GPT of making teens addicted and assisting violence

Elon Musk’s SpaceX (which includes xAI) is expected to officially file for an IPO soon, with a valuation as high as $1.75 trillion. Anthropic currently pays $15 billion per year to use SpaceX’s data centers. The three tech giants gathering in the U.S. stock market have been described by TechCrunch as an unprecedented concentration of high-risk technology stock issuance, unseen since the dot-com bubble era.

Further reading:
SpaceX IPO expected to list in June! How should Taiwanese investors position themselves for SPCX U.S. stock trading?