ChatGPT creator OpenAI has confidentially filed for an IPO, joining its privately-owned AI competitors, but an analyst has warned the mega-listing wave has historically signalled market tops.
Reuters reported that the IPO is targeting a valuation of up to US$1 trillion, following Anthropic’s filing just last week.
OpenAI was last valued at US$852 billion post-money in March, while rival Anthropic’s reported valuation climbed to US$965 billion in late May.
With SpaceX now within days of its potential IPO, all three companies are lined up for the AI listing race that has long been anticipated and is now taking shape at an official level.
On 8 June (9 June AEST), OpenAI said it had submitted a draft prospectus for its initial public offering to the US Securities and Exchange Commission (SEC).
The firm said it expected the information to leak and was therefore “just announcing it,” the company added it has not yet set a timeline but the filing will ensure it is keeping its options open.
“We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best,” OpenAI said in a statement.
Though it did not provide a timeline, reports have suggested September as a possible timeframe for the listing.
On the other hand, PitchBook has previously said it believes that timeline is too ambitious, believing an IPO would be more likely in 2027 due to a mismatch between monthly revenue and the company’s significant infrastructure commitments to major AI players such as Microsoft and NVIDIA.
Despite disagreement over the timing, Betashares senior investment strategist Cameron Gleeson said the confidential filing shows the IPO race among privately held AI giants is finally “heating up”.
He added that if SpaceX’s mega-IPO proceeds as expected, it could add momentum to the race among the world’s most valuable private tech firms to tap public markets for the capital that is needed to fund large-scale AI data centres and infrastructure.
“A successful float of SpaceX may well give both Anthropic and OpenAI more impetus to progress towards a listing on public markets later this year. It sets the stage for a competition between the rival leading AI labs as to who can come to market quickest and what valuations they may attract,” Gleeson said.
Mega-IPOs as a market top signal
OpenAI’s filing news comes after a volatile few days for chip and tech stocks, with a sharp Wall Street sell-off on 5 June sending the Nasdaq down more than 4 per cent – its worst day since April last year.
The weakness followed the US jobs report released that day, which beat expectations and reduced the case for Federal Reserve rate cuts. Until then, US markets had experienced months of sustained gains driven by AI optimism and a strong Q1 earnings season.
While analysts such as Morgan Stanley have described the sell-off as a “healthy reset” and expect the rally to continue, Wealth Within senior analyst Filip Tortevski argued that some of the biggest and most hyped IPOs in history have often signalled market peaks.
Speaking to Investor Daily ahead of the 5 June sell-off, he pointed out that periods of peak euphoria are typically ideal for companies such as SpaceX and OpenAI to move quickly towards listing.
“The job of private companies is to sell at the highest prices possible. Looking at the environment we’re in today, at the height of the AI boom, share prices at all-time highs, extremely bullish, we have a situation where it becomes viable for a company like SpaceX to go public,” Tortevski said.
He pointed to now-infamous examples such as AT&T Wireless’ IPO in December 2000, during the telecoms and tech frenzy ahead of the 2001 dotcom crash.
His comments also come as research house Morningstar has questioned SpaceX’s IPO total valuation target of US$1.77 trillion, arguing the company is more likely to be worth less than half that, at around US$780 billion.
“Just take one look at the prices and see how far away they’ve moved from valuations…all the metrics right now are pointing to euphoric type market behaviour, and if you look through history, that has often been the precursor to crashes,” Tortevski added.
He noted that although these companies are starting to generate revenue, heavy AI spending means they remain loss-making, driving the need to tap public markets.
Some experts have warned there are risks for investors seeking exposure to these IPOs, arguing share prices could rise sharply and leave retail investors at a disadvantage.
There is also debate that exposure may effectively be unavoidable, with index providers such as Nasdaq and FTSE Russell updating rules to fast-track mega-IPOs like SpaceX and OpenAI, forcing passive investors tracking them to buy shares quickly.
However, the S&P 500 has said it will not shorten the 12-month seasoning period for newly listed companies or waive its profitability and public float requirements based on size, meaning such mega-listings would not be fast-tracked into the index.
Ultimately, with hype high and risks mounting, Tortevski said history suggests mega-IPOs are often reassessed by the market around six months later, acknowledging that many overhyped listings in euphoric periods later stabilise into solid businesses.
“I think it’s always safest for investors to let the dust settle. Let the market decide and wait at least six months and the market will start to price it accordingly.
“History says that after six months, you’re probably going to get it cheaper than that IPO price.”
