OpenAI Hits Pause On Its IPO

**Ed Elson** (0:00)
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**Ed Elson** (1:45)
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Welcome to Prof G Markets. I'm Ed Elson. It is June 30th. Let's check in on yesterday's market vitals. The major indices climbed as tech stocks rallied. The Dow closed above 52,000 for the first time. Comcast jumped 5% after announcing it is spinning off NBC Universal and Sky from its cable business. Meanwhile, oil rose after the US and Iran exchanged fire over the weekend. President Trump said the two sides are now set to hold fresh talks today, though Iran denied those claims. And finally, treasury yields were stable after the Supreme Court overruled Trump's attempts to fire Fed Governor Lisa Cook. Still, in a separate decision, the court expanded the president's authority to fire officials at other independent agencies.
Okay, what else is happening? OpenAI is reportedly delaying its IPO until 2027 The company confidentially filed to go public on June 8th and was on track to debut as soon as this fall. But according to the New York Times, the fallout from SpaceX's rocky IPO has pushed OpenAI executives to hit the brakes. Meanwhile, rival Anthropic is racing ahead. CalSTRI now puts the odds that Anthropic goes public this year at 76 percent. So to discuss what this delay actually means for OpenAI and for the AI markets in general, we're speaking with Alex Heath, author of the Sources Newsletter and co-host of the Access Podcast. Alex, thank you for joining us. This is huge news, unconfirmed officially, but this was reported by the New York Times, OpenAI. The plan was they were going to go public, they filed confidentially, and now apparently they're scared of doing it this year.
You do a lot of reporting on OpenAI. What do you actually know about this? What can we actually take away from this news?

**Alex Heath** (3:53)
I think this was always very much in flux. It's been interesting to see how many versions of OpenAI IPO-ing we can get in the press in the last couple of weeks. It's been kind of remarkable. I think there's a lot of investor, banker types who are trying to gen this up. I don't think OpenAI is ready.
I know that they're still trying to get their finance and investor relation org in place for what is needed for a public company. When you do the confidential filing, as OpenAI said when it did that, you're really just setting yourself up with optionality to then be able to go out at a later date. But I remember Reddit, that thing was in confidential filing for years because they thought they were going to go out and then they didn't. I can't remember if it was the pandemic or something else, but it's very common for companies to do a confidential filing, which is just starting the process with the SEC and then delay multiple times, even years in some cases.

**Ed Elson** (4:53)
Doesn't it seem, though, that at least there are people within the company who definitely did want to? The person I'm thinking of was Sam. And I remember we saw that reporting, and who knows what's true at this point. But we saw this reporting where Sam Altman wanted to go public. He was trying to push that. And then the CFO, Sarah Fryer, said, no, I don't think we're ready. I don't think this is the time to do it. I mean, I have to assume that there are people within the company who really wanted this to happen, and now they're probably having to concede maybe this isn't the right time, specifically Sam.