OpenAI hits brakes on trillion dollar IPO

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**SPEAKER_4** (1:30)
OpenAI is holding off on its initial public offering because Sam Altman is chasing a $1 trillion valuation.

**SPEAKER_5** (1:37)
I mean, a trillion dollars puts them in a category of wealth and scale that basically barely exists in the physical world.

**SPEAKER_4** (1:45)
Right. You look at the context of that number against the rest of the economy and it's, well, a $1 trillion market capitalization surpasses the entire value of Walmart.
Think about Walmart for a second. You have thousands of physical big box stores. You have millions of actual human employees.

**SPEAKER_5** (2:06)
Real estate everywhere.

**SPEAKER_4** (2:07)
Exactly. Real, tangible supply chains of trucks, ships and warehouses wrapping around the physical earth.
OpenAI is a software company with a website and an API.

**SPEAKER_5** (2:18)
Yeah. They are actively rejecting a faster cleaner route to the public market specifically to protect that specific target. But the math on the jump they were trying to make is steep.

**SPEAKER_4** (2:27)
Extremely steep.

**SPEAKER_5** (2:28)
Their last private valuation sat at $730 billion. Then they secured a recent funding bump that pushed them up to $852 billion.

**SPEAKER_4** (2:35)
Right.

**SPEAKER_5** (2:35)
And now they are holding out freezing their momentum entirely for the full trillion.

**SPEAKER_4** (2:40)
They had already engaged the whole machinery too. The bankers were hired, the lawyers were brought in, the prep work for a public listing was completely in motion. Now they're just hitting the brakes.
So we are pulling from a stack of financial reports, market analyses and internal memos today to figure out exactly why a company with that much momentum suddenly stops.

**SPEAKER_5** (3:02)
Which brings up the real issue. Does a trillion dollar price tag mean this company has a sustainable fundamentally sound business or are they terrified of what happens when the public actually gets to look at their books?

**SPEAKER_4** (3:15)
Well, the immediate excuse being circulated by the investment bankers for the delay is SpaceX. They are pointing directly at the recent performance of the SpaceX public listing to justify holding off on OpenAI.

**SPEAKER_5** (3:27)
The aerospace hangover?

**SPEAKER_4** (3:28)
Basically, yeah. And the data on that is rough.
SpaceX debuted at a record valuation. The stock open hit a peak of $225 and then within two weeks, the floor just fell out. It plummeted to around $153.

**SPEAKER_5** (3:43)
That is a classic round trip.

**SPEAKER_4** (3:45)
Yeah.

**SPEAKER_5** (3:45)
It is brutal on the psychology of the retail investor.

**SPEAKER_4** (3:48)
Absolutely.

**SPEAKER_5** (3:49)
Because when you consider how a highly anticipated listing like SpaceX actually functions behind the scenes, you realize the institutional investors get their allocation early at the offering price.

**SPEAKER_4** (4:01)
Right. They get in on the ground floor.

**SPEAKER_5** (4:03)
Exactly. The retail buyers, the normal people like you, opening a brokerage app on your phone while drinking your morning coffee, are buying on the open market after the price has already popped. Yeah. You buy at 225, two weeks pass, and you are holding a bag worth 153

**SPEAKER_4** (4:21)
Which is a terrible feeling.

**SPEAKER_5** (4:23)
When retail buyers get burned on a marquee name like that, their appetite for the next mega listing just vanishes. They log out of their accounts, delete the app, and stop buying completely.