OpenAI Files Confidentially for IPO, Intensifying Race Against Anthropic

ChatGPT-maker OpenAI has filed confidentially for an initial public offering, the company confirmed Monday in a blog post. The move comes just over a week after its main rival, Anthropic, also submitted a confidential IPO filing, escalating the competition between the two leading artificial intelligence firms to go public.

OpenAI, last valued at $852 billion post-money, submitted a draft registration statement to the U.S. Securities and Exchange Commission. The company did not disclose the number of shares or a proposed price range, keeping financial details private under the confidential filing process.

Why the IPO Race Matters

The dual filings signal that 2026 is shaping up to be a blockbuster year for public markets, with Elon Musk’s SpaceX also expected to debut at a $1.75 trillion valuation. Industry experts say the first AI firm to list will likely capture a larger share of increasingly scarce capital for AI companies, much of which may already be committed to SpaceX’s anticipated IPO.

David Shapiro, founder and CEO of OpenVC, which oversees the NYSE OpenVC 500 Index tracking the largest public and private U.S. companies, noted that Anthropic’s valuation has surged 123% year-to-date on secondary markets, far outpacing OpenAI’s 11.3% growth. However, OpenAI’s secondary market stock experienced a slight uptick in recent days, suggesting investors may be pricing both firms as ‘dual winners’ in the broader large language model race.

Financial Pressures and Spending

OpenAI’s IPO filing arrives amid reports of significant financial strain. According to The Wall Street Journal, the company recently missed its own targets for new users and revenue. Chief Financial Officer Sarah Friar has reportedly expressed concern that OpenAI’s massive spending on data centers may be unsustainable.

In late March, OpenAI secured $122 billion in the largest funding round in Silicon Valley history, with $3 billion coming directly from retail investors. Yet the firm expects to spend an equivalent amount on computing power for AI research by 2028, and projects an $85 billion cash burn that year even after doubling sales from the prior year. The company does not anticipate positive cash flow until 2030.

Anthropic, by contrast, has presented a more optimistic financial outlook, telling investors it is close to achieving its first quarterly profit. However, with a recent $65 billion funding round and an additional $36 billion in chip-allocated debt potentially on the way, its burn rate remains substantial.

Legal and Governance Challenges

OpenAI’s path to IPO is complicated by ongoing legal battles. The company faces a lawsuit from the state of Florida, which accuses OpenAI and CEO Sam Altman of harming children by providing information to school shooters, offering guidance on self-harm, and addicting young users. This adds to a growing list of lawsuits alleging harm from chatbot interactions.

Last month, a jury dismissed a lawsuit from Elon Musk, one of OpenAI’s co-founders, who alleged the company violated its nonprofit promise. The court found Musk’s claims were filed beyond the statute of limitations.

Internally, OpenAI has faced governance turmoil. In 2022, the board ousted Altman over transparency concerns, only to reinstate him days later. Co-founder Ilya Sutskever and other board members involved in the coup subsequently left the company.

More recently, OpenAI president Greg Brockman and his wife each donated $12.5 million to a pro-AI PAC and a pro-Trump super PAC. The company has distanced itself from these donations, stating they were personal contributions not made on behalf of OpenAI.

What the Confidential Filing Means

The confidential IPO filing allows OpenAI to prepare for a public offering without publicly disclosing detailed financial information or business risks. This process, permitted under the JOBS Act, gives companies flexibility to withdraw or adjust plans without public scrutiny. However, secondary market valuations offer a window into investor sentiment. Anthropic recently reached a $1 trillion valuation on Forge Global, a retail secondary market platform, surpassing OpenAI’s $880 billion valuation recorded in April.

A recent PitchBook report viewed OpenAI as overvalued relative to its fundamentals, suggesting that Anthropic’s filing disclosures will set a valuation comp that constrains how OpenAI can price its own offering.

Conclusion

OpenAI’s confidential IPO filing marks a critical juncture for the AI industry. The race between OpenAI and Anthropic to go public will determine which company secives more capital, sets market expectations, and gains investor trust. With massive spending, legal challenges, and governance issues in the background, the outcome remains uncertain. For readers, the story underscores the high stakes of AI commercialization and the financial realities behind the technology’s rapid advancement.

FAQs

Q1: What is a confidential IPO filing?
A confidential IPO filing allows a company to submit its draft registration statement to the SEC without immediate public disclosure of financial details. This process, available under the JOBS Act, helps companies prepare for an IPO privately and adjust plans as needed.

Q2: How does OpenAI’s valuation compare to Anthropic’s?
OpenAI was last valued at $852 billion post-money, while Anthropic recently reached a $1 trillion valuation on the secondary market platform Forge Global. On the NYSE OpenVC 500 Index, Anthropic’s year-to-date appreciation of 123% far exceeds OpenAI’s 11.3%.

Q3: Why is the IPO race important for AI companies?
Going public provides access to public capital markets, which is crucial for funding the massive computing costs required to train large language models. The first AI firm to IPO may capture a larger share of investor capital, especially as competition for funding intensifies with other major IPOs like SpaceX expected in 2026.