OpenAI Is Making Plans to File to Go Public Very Soon

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So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300,000 can use AI to fill their HR questions, resolving 94 percent of common questions.

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Alex Ossola (0:33)

OpenAI plans to file for an IPO, maybe as soon as this week. Plus, the Trump administration charges Cuba's former president Raúl Castro with murder, escalating its campaign against the country's communist regime.

Todd Blanch (0:47)

For the first time in nearly 70 years, senior leadership of the Cuban regime has been charged in this country, in the United States of America, for acts of violence resulting in the deaths of American citizens.

Alex Ossola (1:01)

And it's about to get a lot harder to earn an A at Harvard. It's Wednesday, May 20th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

We're exclusively reporting that OpenAI, the company behind ChatGPT, is preparing to file for an IPO very soon, possibly as soon as this Friday. The journal has learned that the company's goal is to be ready to go public as early as September.

Berber Jin covers startups and venture capital and joins me now. Berber, a September IPO. Was this the timing that OpenAI had been expecting? Like, what helped determine this timing?

Berber Jin (1:44)

The timing came as a really big surprise to everyone because we knew from our reporting that OpenAI was targeting a listing by the end of this year. But to file a confidential prospectus as soon as this Friday really suggests that they are looking to go basically as soon as possible.

And it's hard to know exactly why they're rushing, but what we do know more broadly speaking is that they're competing against Anthropic and to a certain extent SpaceX to capture the mind share of big pockets of money in the public markets that are looking to invest in AI companies. And each of these different companies see the advantage of being the first or the second to go out and kind of set the narrative around their business ahead of their rivals. There's a lot of pent up demand amongst retail investors and institutional investors like hedge funds, pension funds, etc. to invest in these AI companies.

Alex Ossola (2:44)

What other kinds of challenges does the business face?

Berber Jin (2:46)

There's been a lot of uncertainty recently about whether OpenAI will be able to pay for these giant data center spending commitments they've signed up for, roughly $600 billion of spending that they're on the hook to pay through 2030 And we've reported that OpenAI has recently had some stumbles. They've missed a few internal revenue targets. They've come under very intense competition from Anthropic and Google.

The really big question mark is whether they can get the business in a good enough shape and accelerate their revenue growth in order to tell a story to investors to Wall Street where people feel like their finances are in good condition and that they will be able to pay for these giant computing contracts that they signed up for.

Alex Ossola (3:32)

That was WSJ reporter Berber Jin. Thanks, Berber.

Berber Jin (3:35)

Thank you.

Alex Ossola (3:36)

And breaking news this afternoon, the IPO paperwork for SpaceX was just made public, unveiling key financial details. Read more on wsj.com.

Separately in tech, Meta has begun a big round of layoffs. The cuts of roughly 8,000 jobs, or 10% of the company's staff, are meant to offset the costs of Meta's AI buildout. It's also reassigning thousands of other workers to AI-focused jobs.

The massive gains in chip manufacturers from South Korea to Silicon Valley have hit a volatile stretch. Over several weeks, the rally in chip stocks has helped pull the market out of its Iran-war funk. But semiconductor stocks slid on Friday and Monday. Journal reporter Jared Mitovich says investors are now looking to Nvidia for direction.

Jared Mitovich (4:23)

There's a lot on the line here. It's almost a make or break moment for whether this trip rally can continue, or whether that blip that we saw ending earlier this week could be signs that this rally is petering out a little bit. Investors were really looking for what Nvidia's outlook is, not only in 2027, but even beyond that, what their spending looks like and where they see their business going later on this decade. There's almost no question that the AI build out is succeeding and going to benefit companies like Nvidia in the next 12 to 18 months. But now you're seeing traders scratch their heads and say, what happens after that? Where does this go next?