OpenAI and Anthropic: The Race to IPO Intensifies in AI

OpenAI Prepares for IPO

OpenAI, the company behind ChatGPT, has recently filed a confidential application for an initial public offering (IPO), as announced in a blog post on Monday. This move closely follows that of its main competitor, Anthropic, which has also submitted a request to go public, intensifying the competition between these two leaders in artificial intelligence.

OpenAI's valuation has been estimated at $852 billion following a recent funding round. The company has submitted a registration statement to the U.S. Securities and Exchange Commission (SEC) for a proposed IPO. However, it has not yet specified the number of shares or set a price.

A Pivotal Year for Public Markets

The year 2026 is shaping up to be a significant period for public markets. SpaceX, with a valuation of $1.75 trillion, is also expected to make its debut. This means that three of the most closely watched tech companies could go public in the coming months, a concentration of high-stakes offerings that the markets have not seen in a generation.

OpenAI is rushing towards the IPO despite having recently missed its own targets for new users and revenue, according to the Wall Street Journal. Sarah Friar, the chief financial officer, reportedly expressed concerns about OpenAI's ability to sustain its massive data center expenses. These expenses are indeed enormous.

Colossal Expenses and Funding

By the end of March, OpenAI secured $122 billion in the largest funding round in Silicon Valley history, with $3 billion coming directly from individual investors through banking channels. However, the company expects to spend roughly the same amount on computing power dedicated to AI research by 2028 and plans to burn through $85 billion that year, even after doubling its sales compared to the previous year, according to the Wall Street Journal. To put this in context: OpenAI is asking public market investors to commit to a business that, according to its own projections, will not generate more money than it spends for at least four more years.

AI spending at SpaceX, while lower, also illustrates how the cost of training large language models can exceed the revenue generated by those models.

Anthropic: A More Optimistic Financial Picture

On the other hand, Anthropic has presented investors with a much more optimistic financial picture, claiming it is close to achieving its first quarterly profit. That said, with a recent funding round of $65 billion and an additional $36 billion in debt potentially on the way, Anthropic's burn rate is not exactly modest.

The confidential IPO filing allows OpenAI to begin its preparations for a public offering without publicly disclosing detailed financial information or business risks, which is why the company has not yet shared a stock price or the amount it hopes to raise. That said, secondary markets provide insight into what investors are willing to pay.

Valuation and Secondary Market

Anthropic recently reached a valuation of $1 trillion on Forge Global, a retail secondary market platform, surpassing OpenAI, which was valued at around $880 billion in April.

David Shapiro, founder and CEO of OpenVC, oversees the NYSE OpenVC 500 index, which tracks the largest public and private companies in the U.S. He stated that Anthropic's appreciation rate far exceeds that of OpenAI this year—123% year-to-date compared to 11.3% for OpenAI. However, despite Anthropic's evident boost, OpenAI is not lacking in secondary interest.

"From the perspective of secondary investors, OpenAI had already established a significant portion of its valuation," David Shapiro told TechCrunch. "We haven't seen OpenAI collapse or anything close, and the valuation remains extremely successful, according to the index."

He added that OpenAI's stock on the secondary market "has seen a slight uptick in recent days, indicating that investors may be evaluating both as the 'double winners' of the broader LLM race."

Stakes and Controversies

However, the race to be first to the public markets is a genuine concern. Experts say that whoever goes public first will likely be able to capture a larger share of the increasingly scarce capital for AI companies, much of which will have already gone to SpaceX, which is expected to be the first to IPO among the three.

Moreover, Anthropic's filing disclosures will establish a valuation comparison that will constrain how OpenAI can price its own offering upon filing, according to a recent PitchBook report that considers OpenAI to be overvalued relative to its fundamentals.

Founded in 2015 as a nonprofit research lab, OpenAI disrupted the AI world when it launched ChatGPT in 2022, triggering a wave of advancements in large language models across the industry.

While OpenAI has expanded its products to cater to enterprise and government clients, the company has a strong reputation for being more consumer-focused than its competitor Anthropic. The company has reached true scale, with approximately 900 million weekly active users.

The IPO comes after significant internal conflicts within the company. In 2022, OpenAI's board removed Altman due to a lack of transparency and trust in his ability to uphold the company's mission to benefit all of humanity. Altman was quickly reinstated, and those who participated in the coup, including co-founder Ilya Sutskever, left shortly thereafter.

More recently, OpenAI has been involved in several lawsuits, including a recent one from the State of Florida accusing the company and Altman of harming children by providing information to school shooters, offering advice on self-harm, and making young users addicted. Florida's complaint adds to the litany of lawsuits against OpenAI and other chatbot creators following user delusions, self-harm, suicides, and mass events.

Last month, OpenAI faced a lawsuit after Elon Musk, one of its co-founders and competitors, sued the company and Altman, alleging they violated a promise to keep the company nonprofit. The case was ultimately dismissed after a jury and a judge found that Musk was beyond the statute of limitations when he filed the case in 2024.

OpenAI has also faced criticism after its president Greg Brockman and his wife each donated $12.5 million to Leading the Future, a pro-AI PAC dedicated to countering local politicians advocating for AI regulation. They made similar contributions to MAGA Inc., the pro-Trump super PAC. OpenAI has attempted to distance itself from the "personal" donations of its president, stating that none of the funds were provided on behalf of the company.