OpenAI Is On Track For History’s Richest IPO

• OpenAI is preparing for an initial public offering (IPO) that could value the ChatGPT maker at a staggering US$1 trillion, reports Reuters.
• Should the Sam Altman-founded company pull the trigger, this listing would effectively mark the biggest IPO in history.
• But between the rate at which ChatGPT is burning cash and the perennial speculation of the next generation-defining tech bubble, there’s still considerable road to navigate ahead.

The artificial intelligence boom is reaching a fever pitch as poster child operation, OpenAI, flips on the for-profit switch, and is now laying the foundation for what promises to be a blockbuster initial public offering (IPO).

According to Reuters, the ChatGPT maker is aiming to raise a US$60 billion – “likely more,” per inside sources – for AI infrastructure and acquisitions at an unprecedented debut market cap of US$1 trillion. And in the event Sam Altman & Co. succeed, it’ll absolutely dwarf the listings of the following benchmark listings (not adjusted for inflation)…

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• Saudi Aramco (December 5th, 2019) – US$25.6 billion
• Alibaba (September 18th, 2014) – US$21.8 billion
• SoftBank (December 10th, 2018) – US$21.3 billion
• NTT Mobile Communication Network (October 22nd, 1998) – US$18.1 billion
• Visa (March 18th, 2008) – US$17.4 billion

OpenAI would also instantly be on par with behemoths Warren Buffett’s Berkshire Hathaway and semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC).

The major caveat is, however, that discussions are very much still in their infancy and the game plan – which includes figures and a timeline – could change “depending on business growth and market conditions” (read: whether the AI bubble finally bursts).

As for the matter of a timeline, while both CFO Sarah Friar and company spokespeople have remained evasive on a specific date, publicly kicking the can down the road for a potential 2027 listing (“An IPO is not our focus, so we could not possibly have set a date”), certain advisers have earmarked the second half of 2026.

One has to imagine this is a case of “the sooner the better” while momentum is soundly on OpenAI’s side… and considering the sheer rate at which the next-gen undertaking is burning through cash. In the first half of this year alone, it lost US$13.5 billion against US$4.3 billion worth of revenue – Yahoo Finance outlines a total annual loss of US$27 billion is currently on the cards.

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“I think it’s fair to say that it is the most likely path for us, given the capital needs that we’ll have,” Altman himself noted on the livestream when prompted about an OpenAI IPO.

Just a few months prior, OpenAI disclosed a projected cash burn of US$115 billion through to 2029 – approximately US$80 billion more than previous expectations – and may not even turn a profit until that 12-figure spend. But again, that is assuming they survive whatever market corrections/that long-predicted bubble bursts between now and then.

In related news, chip manufacturer Nvidia recently became the first-ever public company to cross the US$5 trillion threshold, almost entirely predicated on the AI economy’s future fortunes. For context, it now accounts for roughly 16% of the United States’ entire GDP, and as some netizens have humorously pointed out, is worth more than two Canadas.

Too big to fail or the peak of a bubble?

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