OpenAI’s rapid expansion has sparked significant speculation about a potential public offering as investor interest soars. The company’s CFO Sarah Friar revealed to CNBC that OpenAI is currently experiencing “incredible interest” from investors, driven by the impressive trajectory of its valuation.
Growth and IPO Prospects
Friar pointed to the US$11 billion revenue milestone as a possibility, emphasizing OpenAI’s fast-paced innovation and ability to scale efficiently. However, despite this growth, OpenAI faces substantial financial challenges. The company has projected $5 billion in losses on $3.7 billion in revenue for 2024. Even so, Friar remains optimistic, drawing parallels with large-scale tech companies such as Amazon, Microsoft, and Meta.
In a significant development, SoftBank is reportedly close to investing $40 billion in OpenAI, which could boost its valuation to an eye-watering $300 billion. This surge in interest has led to speculation about a potential public listing, despite CEO Sam Altman turning down a $97 billion acquisition bid from Elon Musk and other investors.
Legal Tensions with Musk
While OpenAI continues to experience growth, it is embroiled in a legal battle with Elon Musk, one of the company’s co-founders. Musk is suing the company for breach of contract as OpenAI transitions to a for-profit structure. Friar, however, dismissed concerns about the legal dispute, focusing instead on the company’s growth and expansion goals.
User Growth and Enterprise Momentum
OpenAI’s user base continues to expand at a rapid pace, with weekly active users rising to 400 million in February—up from 300 million in December. The company’s enterprise segment has also doubled in size, reaching 2 million paying business users since September. COO Brad Lightcap attributed this growth to strong consumer adoption, likening OpenAI’s rise to the early stages of the cloud computing revolution.
Developer Engagement and Client Expansion
Another indicator of OpenAI’s success is its growing developer engagement, particularly with its O3 reasoning model. In just six months, traffic to the model has quintupled. High-profile clients, including Uber, Morgan Stanley, Moderna, and T-Mobile, are already leveraging OpenAI’s cutting-edge technology.
Competitive Landscape and Legal Concerns
Despite fierce competition from DeepSeek, a Chinese AI firm, OpenAI maintains confidence in its ability to lead the market. Lightcap acknowledged the growing influence of DeepSeek but stated that it underscored the immense value and interest in AI models. OpenAI has also accused DeepSeek of improper model harvesting, a controversial practice known as distillation.
As OpenAI pushes forward with its mission to reshape AI and expand its market footprint, all eyes will remain on its potential IPO and how it navigates both fierce competition and legal challenges in the coming months.
