OpenAI and Anthropic race to go public as AI funding demands surge
OpenAI filed confidential paperwork with the US Securities and Exchange Commission on Monday to pursue an initial public offering, joining rival AI firm Anthropic in plans to sell shares to the public. The announcement comes one week after Anthropic disclosed its own IPO intentions.
Both companies have not set a timeline. OpenAI said in its statement that "it may be a while because there are things we want to do that are likely easier as a private company." Sam Altman, OpenAI's chief executive, told CNBC last week he would take the company public "when it makes sense."
The two firms are racing to raise capital as their compute costs-the infrastructure and processing power needed to build and run AI systems-have become staggering. OpenAI's compute costs are estimated to exceed $100 billion annually, while its revenue remains a fraction of that figure.
OpenAI's most recent private valuation stood at $852 billion. Anthropic, maker of the Claude chatbot, reached $965 billion in its latest valuation. Both companies are edging toward the $1 trillion mark in private markets.
The IPO push extends beyond the two generative AI leaders. Billionaire Elon Musk's SpaceX is set to debut on Nasdaq on Friday with a target valuation of $1.75 trillion.
Why the rush to go public
Sunil Krishnan, an analyst at Aviva Investors, said the three companies have a "vast need for cash" and "no-one wants to be last" in the race to list publicly. The firms are making enormous investments in AI chips and model training, both of which demand billions in capital.
Anthropic has told investors it expects to turn a profit in the first half of this year as Claude sales have grown significantly. OpenAI and SpaceX, by contrast, remain unprofitable despite their massive revenues and valuations.
OpenAI acknowledged the strategic timing of its announcement. The company said it was revealing its IPO plans because "we expect it to leak" and that going public "is a complicated set of tradeoffs."
What public markets mean for these companies
Listing on stock exchanges will require OpenAI and Anthropic to disclose detailed financial statements and product roadmaps to regulators and the public. The transparency requirements can deter private funding and make deals slower or less appealing, according to Richard Crowley, an assistant professor at Singapore Management University.
The upside is substantial. Public listings will inject billions of dollars in fresh capital into each company's balance sheet-money essential for the ongoing compute infrastructure arms race.
Crowley noted that investors are closely tracking which firm lists first and how the market receives it. "We might typically think of OpenAI and Anthropic as competitors, but the fate of their financing is intrinsically intertwined through the public's perception of the generative AI space," he said.
The two companies have been fierce rivals since Dario Amodei left OpenAI five years ago to co-found Anthropic over disagreements with Altman. They now compete for users, corporate customers, and investor backing.
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