OpenAI Pulls the Trigger

OpenAI is preparing to confidentially file draft IPO registration documents with the SEC, potentially as early as late May, according to CNBC citing sources familiar with the matter. Reuters and The Wall Street Journal separately confirmed the timeline.

The target: a public listing by September 2026 at a valuation north of $1 trillion. Private investors currently value the company at roughly $850 billion, according to Outlook Business.

Goldman Sachs, Morgan Stanley, and law firm Cooley are handling the preparations.

The Musk Factor — And Why the Timing Matters

OpenAI didn't pick this week randomly. A federal court in California ruled against Elon Musk in his lawsuit accusing OpenAI of betraying its original nonprofit mission. Musk had argued the company's conversion to a for-profit structure enriched insiders at the expense of the public good.

The court disagreed. That ruling cleared a significant legal cloud that had been hanging over the IPO process.

OpenAI CEO Sam Altman — who according to TradingKey has explicitly told staff he wants OpenAI to list before rival Anthropic — is now in a race. Anthropic is reportedly targeting October. Altman wants September.

Two Unprofitable Giants, One Market Window

Neither of these companies makes money.

OpenAI is burning cash at a ferocious rate building out AI infrastructure. Minmo Gahng, a finance professor at Cornell University, told Marketplace that none of these companies are "likely to be profitable in the near future" given hardware spending demands.

Anthropic is the one partial exception — according to CNBC, the company is expected to post its first-ever profitable quarter in an upcoming earnings report.

Is This the Market Top?

John Blank, chief equity strategist at Zacks Investment Research, told CNBC's Squawk Box Europe: "I see it as a market top. Everybody knows the top is pretty close to being around and usually it is advertised by these giant IPOs. Back in 1999, we saw the same kind of thing."

The dot-com parallel runs deeper. Jay Ritter, a finance professor at the University of Florida, noted that when Netscape went public in 1995 — barely a year old — it kicked off the dot-com boom. The difference now: OpenAI is 10 years old, Anthropic is 5. These are mature revenue-generating businesses, not garage startups.

But mature revenue is NOT the same as profit. OpenAI potentially raising enormous capital could absorb significant market liquidity in a short period, according to analyst Daniel Newman of Futurum Group.

What the Coverage Is Missing

Most outlets are framing this as a straightforward "tech is back" narrative. Few reports prominently flag the governance complexities of these private companies as they move toward public markets.

Meanwhile, OpenAI's own spokesperson told CNBC the company "regularly evaluates different strategic options as part of normal governance."

OpenAI's Reputation Problem

While the financial press focuses on valuations, OpenAI is managing a full-blown reputation crisis. Someone threw a Molotov cocktail at Sam Altman's San Francisco home last month. College commencement speakers are getting booed for praising AI. OpenAI's chief of global affairs, Chris Lehane — a Clinton-era crisis communications veteran — is now tasked with making the public trust a company asking them to invest a trillion dollars.

The reputational damage represents a material business risk that isn't reflected in the valuation.

The IPO Race

AI companies with no combined annual profit are preparing to ask the American public and institutional investors for potentially hundreds of billions of dollars in the same market window. The legal hurdles for OpenAI just cleared. The race is accelerating.

Amazon lost money for years. So did Tesla.

John Blank at Zacks suggested we're watching 1999 replay in slow motion with better graphics.

Anyone considering these IPOs should read the filings carefully. Especially the risk factors about companies that "may not achieve profitability in the future."