Sam Altman’s OpenAI To File IPO Papers As Early As Friday? What We Know

Sam Altman's OpenAI could file its papers for an Initial Public Offering (IPO) within days or weeks, according to a report. People familiar with the matter told The Wall Street Journal that the AI giant is working with bankers, including those Goldman Sachs and Morgan Stanley, on a draft public issue prospectus that it plans to file confidentially with regulators possibly as early as Friday. The goal for Altman was to be ready to go public as soon as September.

The insiders, though, cautioned that the plans remain fluid and may change.

Altman has been eager to initiate an IPO for OpenAI, while the company's Chief Financial Officer, Sarah Friar, has said the move may need more time, The Wall Street Journal reported. A recent funding round valued the AI giant at $852 billion.

The company cleared a large hurdle to its public issue earlier this week, when it won a legal battle against co-founder turned rival Elon Musk. However, the road ahead is not easy for OpenAI. The company faces concerns over whether it will be able to generate enough revenue to fulfil its data-centre spending commitments.

Another obstacle is its rivalry with AI firm Anthropic, which owns the model Claude. Anthropic is currently in talks with investors to raise money at a valuation of $900 billion, which would take it ahead of OpenAI.

The Sam Altman-led firm recently missed multiple internal revenue and user targets due to stiff competition from Google and Anthropic. This led to scrutiny on the company's spending, the Wall Street Journal stated, with sources claiming that board directors had questioned Altman's efforts to secure more computing power despite a slowdown in business.

Despite reports of differences on the timing of OpenAI's IPO and other matters, Altman and Friar issued a joint statement in April that read, “We are totally aligned on buying as much compute as we can and working hard on it together every day,” The duo called news of any differences or pulling back on commitments for new computing resources “ridiculous”.

As for Musk, the Tesla owner has said that he plans to appeal the verdict against him soon. Musk's company, SpaceX, is also expected to unveil its IPO paperwork as soon as Wednesday. The firm is targeting a potential June offering.

Goldman Sachs will have the lead left position on the prospectus, insiders told CNBC, meaning it is the underwriter primarily responsible for coordinating the public issue, overseeing investor engagement and helping decide the final share price. The firm will be followed by Morgan Stanley, and Bank of America, Citigroup and JPMorgan Chase.