OpenAI is leaning toward postponing its IPO until next year, according to three people involved in the company’s deliberations, marking a significant shift in strategy for the AI powerhouse.
The New York Times reports that the maker of ChatGPT had previously hired bankers and lawyers with the goal of going public as soon as the third or fourth quarter of this year. Sam Altman, the company’s chief executive, had pushed those advisers to find a way for the start-up to achieve a valuation of $1 trillion, up from its last private valuation of $730 billion, according to the people involved, who requested anonymity because they were not authorized to speak publicly about internal discussions.
However, a series of recent developments has prompted OpenAI’s executives to temper their ambitions. The primary concern is the performance of Elon Musk’s SpaceX following its IPO earlier this month. SpaceX’s IPO was the largest ever, raising more than $85 billion and reaching a valuation of $1.77 trillion on its debut. Since then, the stock has experienced a notable decline, with shares falling to $153 at the end of trading on Thursday after hitting a high of $202 last week.
Global markets have also been volatile in recent weeks, with technology stocks weighing down major indexes as investors grow skeptical about whether AI companies can fulfill their ambitious promises. This market turbulence has led OpenAI’s advisers, in conversations with the company over the past week, to warn that there may be limited enthusiasm from retail investors for OpenAI’s shares, two of the people involved said.
The slowdown in OpenAI’s IPO timeline could come as a disappointment to both Wall Street and Silicon Valley. Public offerings from OpenAI and its competitor Anthropic, which has also announced plans for a Wall Street debut, had been expected to generate substantial wealth. OpenAI disclosed this month that it had filed confidential paperwork with securities regulators to begin the going-public process, though it did not publicly commit to any specific timeframe.
OpenAI’s financial situation adds another layer of complexity to its IPO considerations. The company has faced significant costs associated with training and running its large language models, while also navigating a competitive landscape that includes well-funded rivals like Anthropic, Google, and others.
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Read more at the New York Times here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.