OpenAI’s IPO May Be Coming Soon—and It Could Be the Largest in History

The ongoing shutdown of the federal government might be threatening the recovery of the IPO market, but news that OpenAI has reorganized its corporate structure to launch a for-profit company could keep investor optimism alive. That new structure paves the way for the AI giant to pursue a public offering—and that could happen within the next two years.

OpenAI hasn’t formally committed to an IPO, but CEO Sam Altman, in a livestream broadcast discussing the new structure, said an initial public offering was the most likely path for the company’s future.

An OpenAI IPO would likely be one of the largest in Wall Street history. The company has a current valuation of $500 billion, following a secondary share sale earlier this month of $6.6 billion. (The company had authorized the sale of up to $10.3 billion in shares, but many investors and employees chose to keep their holdings for now.) To put that in perspective, at the moment, the record holder for the largest IPO in U.S. history is Chinese e-commerce giant Alibaba, which saw its market cap reach $236 billion on the day of its IPO.

An IPO makes sense for OpenAI, given its ambitions. On the livestream, Altman said the company hopes to “build an infrastructure factory where we can create one gigawatt a week of compute.” Even if the company manages to reduce the cost of that, Altman said it could run $20 billion over the five-year lifecycle of the equipment. It also plans to continue working on artificial general intelligence (AGI), a theoretical milestone that would allow AI to reason like human beings.

None of those goals are cheap. And the company’s investors, who have put over $57 billion into OpenAI since its founding, are eventually going to seek an exit.

That said, a for-profit OpenAI is something the company’s critics and competitors, which include Elon Musk and Meta, have sought to prevent, saying that allowing startups to enjoy the benefits of nonprofit status before switching to for-profit would set a dangerous precedent. A publicly-traded version of the company could be an even bigger threat to those rivals, given its market potential.

While investors would likely clamor for an OpenAI IPO, it could also further escalate fears of an AI bubble. While executives in the space have shrugged off bubble fears, plenty of other prominent names are sounding warnings. Bridgewater Associates founder Ray Dalio said Tuesday his personal “bubble indicator” was relatively high right now, noting that 80 percent of market gains have been from Big Tech companies. Bill Gates, meanwhile, compared the AI bubble to the dot-com bubble of the 1990s and 2000.

Not everyone is convinced there’s an AI bubble, though. Goldman Sachs, in a note to investors earlier this month, said it believes AI’s story is just beginning. “The enormous economic value promised by generative AI justifies the current investment in AI infrastructure, and overall levels of AI investment appear sustainable as long as companies expect that investment today will generate outsized returns over the long run,” analysts wrote.

Should OpenAI pursue an IPO, it already has some big names in tech expressing interest. Microsoft’s 27 percent ownership stake in the company would give the tech giant’s stock a notable boost, should OpenAI decide to trade on the open market. And Nvidia’s Jensen Huang, speaking at a press conference earlier this week, said he expected the IPO to happen in the near future.

“I wish back in the earlier days that we had invested a lot more,” Huang said. “If you told me that OpenAI is going to go public next year, I’m not surprised, and in a lot of ways, I think this can be one of the most successful public offerings in history.”