The Filing Is Imminent

OpenAI is preparing to confidentially file a draft IPO prospectus with the SEC as soon as Friday, according to CNBC, which confirmed reporting first published by the Wall Street Journal.

The banks running the deal are Goldman Sachs and Morgan Stanley — the same two firms leading the SpaceX IPO. Sam Altman reportedly wants OpenAI trading on public markets by September 2026.

OpenAI CFO Sarah Friar told CNBC last month that it is "good hygiene" for a company of OpenAI's size to "look and feel and act" like a public company. An OpenAI spokesperson declined to comment beyond saying "Our focus remains on execution."

The Context: A Week After Musk Lost in Court

The timing coincides with a significant development. According to TechCrunch, OpenAI's IPO push accelerated the day after Elon Musk lost his federal lawsuit — the one that threatened OpenAI's corporate restructuring, its leadership, and its finances.

Musk co-founded OpenAI, tried to sue it into oblivion, and failed. Now his AI company xAI — merged with X (formerly Twitter) — is racing to IPO at the same time. SpaceX was expected to publicly disclose its own prospectus as early as Wednesday, according to CNBC.

Both companies are backed by Goldman Sachs and Morgan Stanley, competing for the same investor dollars.

The Numbers Being Thrown Around

Private investors currently value OpenAI at more than $850 billion, per CNBC. CMC Markets puts the upper range of valuation estimates near $1 trillion.

For context: OpenAI has over 800 million weekly ChatGPT users. More than one million companies use its API. Revenue streams include $20/month consumer subscriptions, enterprise licensing, a $13 billion Microsoft partnership (Microsoft takes a 20% revenue share), and an advertising tier launched in January 2026.

Those are real numbers. The company is genuinely massive.

The Valuation Problem

CNBC ran a significant piece this week that most coverage is overlooking: cheap AI could undermine OpenAI's IPO valuation entirely.

AI benchmarking firm Artificial Analysis ran every major model through the same 10 evaluations with these cost results:

• Anthropic's Claude: $4,811 per workload
• OpenAI's ChatGPT: $3,357
• DeepSeek (Chinese): $1,071
• Kimi (Chinese): $948
• Zhipu's GLM (Chinese): $544

Claude costs nearly nine times more than the cheapest Chinese competitor for equivalent work. OpenAI costs six times more.

Enterprise Customers Are Already Shifting

This isn't theoretical. Enterprise AI budgets exploded — 45% of companies surveyed by cloud cost firm CloudZero spent more than $100,000 per month on AI in 2025, up from 20% the year prior, per CNBC.

That money has to go somewhere cost-effective. Chinese models are capturing a growing share of enterprise AI traffic, according to CNBC's reporting.

Meta, Shopify, Spotify, and Pinterest all flagged rising AI inference costs as a drag on margins this earnings season. Shopify specifically cited increased LLM costs eating into economies of scale.

Google CEO Sundar Pichai said at Google I/O this week that "many companies are already blowing through their annual token budgets, and it's only May" — and then pitched Google's cheaper alternatives.

What the $850 Billion Valuation Assumes

The valuation assumes OpenAI holds its market share and pricing power. It assumes enterprise customers keep paying a premium because no good alternative exists.

That assumption is eroding now — before the company has even filed publicly.

Western companies that won't touch Chinese models for security reasons still have options: Nvidia, Cohere, Mistral, and others are building cheaper, smaller, more efficient models aimed directly at the enterprise segment OpenAI needs to dominate.

Competition is coming from multiple directions.

What Investors Should Know

If you're thinking about buying OpenAI stock at IPO, you're betting that OpenAI can defend premium pricing against Chinese competitors charging a fraction of the cost, against Google's scale, and against a wave of open-source alternatives — all while burning through capital at scale.

OpenAI has genuine brand power and the largest user base in AI. But an $850 billion valuation for a company in a commoditizing market carries real structural risk.

Investors should evaluate the valuation on its merits, not the narrative surrounding the filing.