OpenAI is having “informal” talks with Wall Street banks about a possible IPO in the fourth quarter, according to The Wall Street Journal.
Rival Anthropic is also thought to be seeking to go public soon. OpenAI wants to beat Anthropic to the public markets, the paper said. Anthropic has held IPO talks with banks as well and stepped up hiring of finance executives. It expects to break even in 2028.
Tapping the public markets for financing would help, since OpenAI is spending more billions in compute services and data centers than it is currently earning. Meanwhile, it is in talks with Amazon to get up to $50 billion in funding and with SoftBank for an additional $30 billion on top of $41 billion it already invested in the startup, the paper reported earlier.
Like Anthropic, OpenAI is expanding its finance team. It recently hired a new chief accounting officer and a new corporate business finance officer to oversee investor relations.
But the Journal contends that the path to an IPO won’t be smooth, as it is facing fierce competition from Google, whose AI tools are rising in popularity. OpenAI had declared a “code red” emergency to improve the quality of ChatGPT, according to the paper.
OpenAI also is facing an April trial in a lawsuit filed by Elon Musk, who seeks up to $134 billion in damages. Musk contends that OpenAI misled him when it moved away from its original nonprofit mission. OpenAI has pivoted to becoming a for-profit entity with a nonprofit parent.