OpenAI’s chief financial officer (CFO), Sarah Friar, has indicated that a potential initial public offering (IPO) for the company could be on the horizon, dependent on favourable market conditions and its level of preparedness. Speaking at the Dublin Tech Summit, Friar outlined OpenAI’s recent restructuring efforts, which involve converting its for-profit segment into a public benefit corporation (PBC). This corporate structure aims to balance shareholder returns with social objectives, differing from nonprofits that focus solely on public interests, according to reporting by Reuters.
The ChatGPT developer initially disclosed plans in December 2024 to transition its business unit into a PBC. The company recently refined these plans to ensure its nonprofit parent entity maintains control over the PBC through significant shareholding. This strategic move is expected to allow OpenAI’s profit-driven segment to secure the additional capital required to sustain its competitive edge in the fast-evolving AI landscape.
Discussing the timing of a potential IPO, Friar emphasised the critical role of market conditions. She noted that even if a company is primed for an IPO, success hinges on the market’s receptiveness. “You can show up at the altar all ready to go, and if the market’s not ready for you, yeah, you’re just out of luck,” she said. The CFO added that achieving business predictability is essential for transitioning into a public company. Though some level of unpredictability might be tolerated during periods of rapid growth, markets generally prefer stability, according to Friar.
Substantial investment required for future operations
Friar also touched upon OpenAI’s financial needs for future operations. She highlighted that while a 1-gigawatt (GW) data centre costs about $50bn, OpenAI aims to expand its capabilities to approximately 10GW over the next two years. This expansion underscores the substantial capital investment required to remain at the forefront of AI development.
The burgeoning AI search market has emerged as a focal point for OpenAI. Friar indicated that while efficiency improvements are pursued, the ultimate goal is to identify and develop breakthrough products rather than merely focusing on incremental cost reductions.
Recent reports suggest that OpenAI and Microsoft are renegotiating partnership terms to facilitate the AI firm’s potential IPO while maintaining Redmond’s access to top-tier AI models. The Financial Times reported discussions around Microsoft’s equity stake in OpenAI’s new for-profit entity in return for its extensive investment. Microsoft may consider reducing its equity share in exchange for extended technological access beyond 2030.
Prior media reports indicated that OpenAI decided against proceeding with plans to strip ultimate control from its nonprofit board but maintained intentions for transitioning its business unit into a PBC—a model balancing profit with social objectives similar to those employed by competitors like Anthropic and Elon Musk’s venture xAI. According to an unnamed source cited by the Financial Times, this shift is critical from investors’ standpoint and will lay groundwork for any future IPO considerations.
Read more: OpenAI and Microsoft engage in discussions to enable funding and IPO
