An OpenAI spokesperson told Reuters that “an IPO is not our goal, so we could not set a date,” adding that the company is “building a strong business and advancing its mission to ensure everyone benefits from AGI.”
Revenue grows as losses rise
Preparations for the IPO are carried out in accordance with restructuring OpenAI ended on October 28, which reduced the company's costs dependence on Microsoftwhich has committed to invest $13 billion and now owns about 27 percent of the company. Most recently, OpenAI was valued at approximately $500 billion in private markets.
OpenAI started as a nonprofit in 2015 and a few years later added a commercial arm that oversees nonprofits. Under the new structure, OpenAI is still controlled by a nonprofit organization, now called the OpenAI Foundation, but it gives the nonprofit a 26 percent stake in OpenAI Group and a warrant for additional shares if the company hits certain milestones.
A successful OpenAI IPO could bring significant benefits to investors including Microsoft, SoftBank, Thrive Capital and MGX in Abu Dhabi. But even so, OpenAI faces an uphill financial battle. The ChatGPT maker expects to reach about $20 billion in revenue by the end of the year, but its quarterly losses are significant, according to people familiar with the company's finances who spoke to Reuters.
Microsoft's earnings report on Wednesday provided insight into the scale of those losses. The company said its share of OpenAI's losses reduced Microsoft's net income by $3.1 billion for the quarter ended Sept. 30. Since Microsoft owns 27 percent of OpenAI under the new structure, this means OpenAI lost about $11.5 billion in the quarter as noted Register. This quarterly loss figure is more than half of OpenAI's expected revenue for the full year.
