OpenAI is caught between two difficult choices: go public now despite unresolved financial challenges, or risk losing its window as competitors like Anthropic and SpaceX rush to raise record-breaking sums. The company, valued at $852 billion in its last funding round, has failed to execute several strategies to monetize ChatGPT, including advertisements and erotic chatbots, leaving fundamental questions about its path to profitability unanswered.

Why Is OpenAI's IPO Timing So Critical Right Now?

The AI sector is experiencing what analysts call a "mega-IPO season." Elon Musk's SpaceX, which owns xAI, is floating this month, while Anthropic confidentially filed for an IPO on Monday in what the New York Times described as a "once in a generation" moment for Wall Street. Google's parent company, Alphabet, is raising $80 billion to fund a larger AI infrastructure buildout, marking what analysts say is the largest equity fundraising ever.

For OpenAI, the timing presents a paradox. A year ago, CEO Sam Altman was blogging about creating "science fiction" tools that could "massively accelerate scientific discovery" and secure American leadership in AI through a $500 billion investment called Stargate. Now, in 2026, the company needs more capital but faces skepticism about whether it can actually make money.

What Are OpenAI's Financial Challenges?

The bare facts reveal a company struggling with basic economics. According to reporting from The Information, OpenAI made revenue of $5.7 billion in the first quarter of 2026, but with adjusted negative margins of negative 122 percent, meaning it lost $1.22 for every dollar it spent. While these numbers cannot be independently confirmed since OpenAI does not release financial details publicly, they underscore a fundamental truth of the AI economy: the computing power that makes ChatGPT possible is expensive and is not getting cheaper with scale.

This winter, OpenAI successively announced and then failed to execute several strategies to monetize ChatGPT. CEO Sam Altman had previously called advertisements a "uniquely unsettling" proposition and a "last resort," yet the company pursued the strategy before backing away. Similarly, after teasing the idea of erotic chatbots in late 2025, OpenAI abandoned the concept in March, saying its other work was a "higher priority".

How Are Experts Assessing OpenAI's IPO Readiness?

Investment professionals remain cautious. Russ Mould, an investment director at AJ Bell, stated that assessing OpenAI's valuation is difficult without seeing the numbers. "Until we see the numbers, it's very difficult for us to assess the valuation. We need to know what the projected market cap might be, what the revenues are, what cashflow looks like," he explained.

Adrian Cox, a thematic strategist at the Deutsche Bank Research Institute, observed that OpenAI is positioning itself as a mature, IPO-ready business. At an event earlier this month in Australia, Altman struck a sharply different tone around AI-related job loss than he did a year ago, saying he did not expect a "jobs apocalypse." Cox noted that "the demands of a public company are very different from a private company and the transparency that is required in going public has caused not only a change in strategy, but also a change in tone around the company".

What Internal Tensions Could Derail an IPO?

Behind the scenes, reported clashes between OpenAI's chief financial officer, Sarah Friar, and Altman have raised questions about the company's readiness. Friar has reportedly expressed doubts that OpenAI is ready to go public this year and has raised reservations about whether it can cover its computing costs.

These tensions reflect a deeper strategic question: can OpenAI afford to wait? Cox argued that "this feels like the year for mega AI IPOs," noting that demand seems to be there from both retail investors and users for AI. However, there is only so much capital available to share with others planning to go public, such as Anthropic, which last week overtook OpenAI with a valuation of $965 billion.

Cox

Steps to Understanding OpenAI's IPO Decision

• Financial Transparency: OpenAI must disclose detailed revenue, cost structure, and projected profitability timelines to investors, which represents a significant shift from its current private status.
• Competitive Positioning: The company needs to articulate how it will compete with rivals like Anthropic and maintain market leadership while managing massive computing infrastructure costs.
• Monetization Strategy: OpenAI must present a credible plan to generate sustainable revenue beyond subscription fees, addressing the failed advertising and erotic chatbot initiatives.
• Regulatory Landscape: The company should address growing concerns about AI safety, unregulated deployment, and potential legal liabilities, including ongoing litigation related to ChatGPT's impact on users.

What Could Happen If OpenAI's IPO Flops?

The stakes extend beyond OpenAI itself. For some observers, including Gary Marcus, a noted AI critic and professor at New York University, a failed IPO could signal the start of something bigger: cracks in the "fantastical thinking" that undergirds OpenAI and its rivals' business models. If OpenAI's stock were to slide, there could be potential knock-on effects for the broader economy.

Significantly, US indexes including the S&P 500 and the Nasdaq are considering changing their rules, or have already changed them, around including newly floated companies on their indexes. This could lead to ordinary investors being more exposed to OpenAI's fortunes than they might expect.

However, history offers some perspective. Facebook's IPO was also considered a flop, yet the company is now worth more than $1.5 trillion. Cox noted that "the market has changed, and OpenAI is no longer the symbol of the AI boom, the way it was even a year ago. Its fortunes are not necessarily a sign of how AI is going generally." He added that "there has been a diversifying of the AI narrative over the past couple of years, so any one IPO is probably less likely to be taken as a bellwether for the entire industry than it would have been before".

Cox

The question facing OpenAI is not whether it can go public, but whether it can afford not to. With capital pools finite and competitors moving fast, the window for a successful mega-IPO may be closing. Yet without solving its fundamental profitability challenge, going public could expose the company to scrutiny it has long avoided.