OpenAI is preparing to privately file a draft of its IPO prospectus as soon as Friday, as the company prepares for what could be one of the largest public markets in history, CNBC confirmed Wednesday.
The intelligence firm, valued at over R850 billion by private investors, works with banks including Goldman Sachs again Morgan Stanley preparing to apply in the coming days or weeks, according to a source familiar with the matter who asked not to be identified because the information is confidential.
“As part of normal governance, we are constantly evaluating a range of strategic options,” an OpenAI representative said in a statement. “We’re focused on execution.”
OpenAI was preparing for an IPO as soon as the fourth quarter of this year, as CNBC previously reported. OpenAI CFO Sarah Friar told CNBC last month that it’s “pretty neat” that a company of OpenAI’s size “looks and feels and acts” like a public company, but wouldn’t comment on a specific timeline.
Goldman Sachs and Morgan Stanley did not comment. The Wall Street Journal was the first to report the private placement.
OpenAI preparations come as Elon Musk’s rival, SpaceX, which merged with xAI earlier this year, will go public with its IPO as soon as Wednesday. Goldman Sachs will have the lead position on the SpaceX prospectus, followed by Morgan Stanley, then Bank of America, Citigroup and JPMorgan Chase, sources told CNBC.
SpaceX’s offering is expected to bring in a record amount after it was recently valued at $1.25 trillion in February. It filed privately with the Securities and Exchange Commission last month.
Musk and OpenAI CEO Sam Altman are taking their bitter feud to Wall Street after the former friends and co-founders spent much of the past month facing off in federal court in Oakland, California. Musk is suing OpenAI, Altman and Greg Brockman, the company’s president, saying they have gone back on their vow to keep the company not-for-profit.
On Monday, an advisory judge said Musk waited too long to plead guilty, a decision that was quickly upheld by Judge Yvonne Gonzalez Rogers. Musk called the decision “calendar technology” in a post on his social network X.
OpenAI started the AI boom by launching its ChatGPT chatbot in 2022, and has grown into one of the world’s most important private companies since then.
The company has raised more than $180 billion from investors, and continues to burn through cash at a historic pace. As Altman heads toward an IPO, he’s under pressure from investors to show the numbers work, while facing increasing competition from rivals, notably Anthropic, which is winning in the business and AI coding market.
Anthropic is currently in talks with investors to raise $900 billion, which will propel OpenAI forward. The company said in April it topped $30 billion in annual revenue.
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