OpenAI Files for IPO in Test of Investor Appetite

SPEAKER_1 (0:00)

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Luke Vargas (0:33)

OpenAI files to go public in what will be a major test of investor confidence that it can meet its computing commitments through 2030

Sam Schechner (0:40)

Raising cash from public markets can help it finance those commitments. At the same time, it means that investors are going to get a lot more detail and are going to be able to scrutinize whether its revenue is growing fast enough to make good on those commitments. This is both a super important way for them to raise capital, but it could be a double-edged sword.

Luke Vargas (0:58)

Plus, the Pentagon adds Alibaba and Evie Maker BYD to a list of firms that it says are helping China's military and Maine Democrats stand by Senate candidate Graham Platner despite allegations of misconduct. It's Tuesday, June 9th. I'm Luke Vargas for the Wall Street Journal, and here is the AM Edition of What's News, the top headlines and business stories moving your world today.

OpenAI has confidentially filed IPO paperwork with the SEC, setting up the ChatGPT creator to potentially go public as soon as this fall. The move comes after rivals Anthropic and SpaceX announced plans for Mammoth public listings. And while we don't have many specifics, OpenAI did say there's a complicated set of tradeoffs to going public, as tech reporter Sam Schechner explains.

Sam Schechner (1:49)

What we do know is that they are in an intense competitive race. Anthropic recently surpassed OpenAI's private valuation. They are pulling ahead with business customers.

OpenAI still has the bigger ChatGPT consumer business, but it's a really tight race. And banks have told these two companies that whoever is first to the public markets could get the lion's share of the money from those markets. The company has hundreds of billions of dollars in commitments that they've made to building and financing computing. And if they're going to finance those, they're going to have to find the way to either generate that cash, to raise it through equity, or to borrow it in debt.

Luke Vargas (2:28)

OpenAI recently completed the largest funding round in the history of Silicon Valley, raising $122 billion from amazon.com, Nvidia, SoftBank, and other investors.

The Pentagon has updated its annual list of Chinese military-linked companies, adding around two dozen new entities including tech giants Alibaba, Baidu, and electric car maker BYD. The designations limit the company's operations in America and bar them from doing business with the US military, suggesting that national security officials see critical risks in Chinese commercial sectors far beyond just semiconductors and AI. Alibaba, Baidu, and other newly added firms have denied any ties to Beijing's military, and are weighing actions to be removed from the list. Meanwhile, China's export engine is revving up, with outbound shipments jumping nearly 20 percent in May, beating economists' forecasts. Chinese semiconductor exports more than doubled last month thanks to the global AI boom while shipments to the US rocketed over 35 percent. The export surge is keeping Beijing on track to hit its 2026 growth targets, but is bound to reignite tensions with global trading partners who argue that China's state subsidies create an unfair playing field.

It's primary day in Maine, the site of one of the country's most competitive Senate races this year. In it, incumbent Republican Susan Collins is set to face the likely winner of today's Democratic primary, oyster farmer, marine veteran and political newcomer Graham Platner. That is, in spite of Platner being the subject of a number of controversies, from his having a Nazi-linked tattoo to new reports from the journal that he engaged in sexually explicit texts with other women while married. National politics reporter Eliza Collins attended a town hall on Sunday where voters could ask Platner about allegations of past misconduct, but she told us that no one did.

Eliza Collins (4:26)

His supporters really stuck with him. There were zero questions about any of the allegations. Voters passed around a poster board where they wrote messages, including someone writing, everybody has a past, keep going. Another person wrote, stay strong. For these supporters, I spoke to. These allegations really have not swayed them. They are totally bought into Platner's saying that he does have a dark past. He has said he was a bad partner, that he was angry, but he has sought help. For a lot of people I talked to, him basically owning up to these allegations was enough. Now I should say that other allegations, including one of abuse from an ex, Platner has denied.