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It was supposed to be the year of the mega IPO. But OpenAI may throw a wrench in that plan.
“We need OpenAI and Anthropic to go public so we can start to see other software IPOs come to market,” said Brian White, co-head of technology investment banking at Piper Sandler. “The market is now expecting it, so it’s not a matter of it, just when.”
After disclosing last month that it had already confidentially submitted draft IPO documents to the SEC, concerns about the stock market and the company’s growing losses have led OpenAI executives to consider delaying until 2027, according to The New York Times.
While a number of factors are shaping each IPO contender’s ultimate timeline, whatever OpenAI decides will have an impact on everyone else. Let’s consider three options:
Scenario A: OpenAI delays, Anthropic goes first
If OpenAI delays its IPO, it would cement rival Anthropic’s opportunity to take the leap first—and reap the benefits that come with doing so.
“The company that goes first gets to define ‘the playing field': Which companies are the comparables, what is the valuation, what are the key metrics and measures of success,” said Lise Buyer, partner and founder of Class V Group, an IPO advisory firm. “The competitor either has to follow that lead or clearly explain to potential investors why they are different and should be treated differently.”
Scenario B: OpenAI delays—and so does Anthropic
Anthropic’s IPO timing doesn’t entirely depend on OpenAI, but it’s at least a consideration.
“The delay [could] give Anthropic breathing room to prove that Claude can hold ground” before going public, said Harrison Rolfes, senior analyst at PitchBook covering private companies. “The better play would be Anthropic not timing their IPO to OpenAI’s but to Claude’s capabilities and resolution with the government so that the market will price the stock on moat, not on the sequence.”
Scenario C: OpenAI doesn’t delay—but doesn’t hit a $1 trillion valuation
There’s still the possibility that OpenAI stops overthinking and pulls the trigger at a more moderate price.
CEO Sam Altman is reportedly hoping for a $1 trillion valuation at IPO, but with concerns over the company’s profitability, that may be a challenge. Nevertheless, investors say OpenAI could still have a path to reach that milestone once public. |
