Following rivals Anthropic and SpaceX in launching their initial public offering (IPO) processes, artificial intelligence giant OpenAI has officially joined this unprecedented mega-IPO race. On Monday local time, OpenAI announced it had confidentially submitted a draft S-1 registration statement to the U.S. Securities and Exchange Commission (SEC), though the company emphasized that it has not yet finalized a specific IPO timeline. With these three highly valued tech companies now heading toward the public markets, whether U.S. equities can absorb the combined nearly $4 trillion in added market capitalization has become a subject of intense debate among investors and fund managers.
OpenAI Joins IPO Queue, Emphasizing No Rush to Go Public
OpenAI confirmed the news in a statement, acknowledging it disclosed the filing proactively because it anticipated the document would be leaked. “We recently filed our S-1 confidentially and expect it will leak, so we decided to disclose it ourselves,” the company said in its statement. “We haven’t decided on a timeline yet—it may take some time, as there are things we want to do that are easier to accomplish while remaining private. But this involves complex trade-offs, and filing gives us the option to go public at the optimal moment as early as possible.” This aligns with earlier remarks by OpenAI Chief Financial Officer Sarah Friar, who in April stated that for a company of OpenAI’s scale, adopting the “image, operations, and mindset” of a public company represents a “good governance practice.”
According to informed sources, OpenAI is working with Goldman Sachs and Morgan Stanley on IPO preparations, with law firm Cooley also part of the advisory team. If all proceeds smoothly, the company could enter the capital markets as early as this fall. Prior to its official listing, OpenAI plans to launch an employee tender offer in the coming weeks, allowing employees to sell a portion of their shares at the valuation from its most recent funding round completed in March—$852 billion—to alleviate internal liquidity pressures. To date, OpenAI has raised over $180 billion in total funding but continues to spend heavily on building the massive infrastructure required to support AI training and operations.
Notably, a major legal obstacle to OpenAI’s IPO was recently removed. Last month, a California court dismissed Elon Musk’s lawsuit against OpenAI and CEO Sam Altman, with the jury finding that Musk had waited too long to assert that the company breached its non-profit commitments. The judge adopted this ruling in court. Although Musk argued the decision addressed only a “procedural technicality” rather than the merits of the case, the outcome has clearly eliminated significant uncertainty from OpenAI’s path to an IPO.
Altman’s “Third Phase” and Strategic Focus
Concurrently with the IPO filing, Altman outlined OpenAI’s entry into what he described as its “third phase” in a blog post. He divided the company’s evolution into three stages: the first focused on foundational research toward Artificial General Intelligence (AGI); the second involved becoming a product company and observing how users interacted with its tools; and the current third phase centers on “an economy being reshaped around AI, where the core challenge is making advanced AI abundant, accessible, safe, and useful so that everyone and every organization can benefit.”
To that end, OpenAI has articulated three strategic objectives: building systems capable of autonomously conducting AI research—with internal projections suggesting that by March 2028, a significant portion of research work could be carried out collaboratively by AI and human researchers; accelerating overall economic growth through advances in science, productivity, and broad-based sharing of benefits; and ultimately enabling every person on Earth to have access to a “personal AGI.”
Amid intense competition, OpenAI is striving to become more focused. In recent months, the company has shut down peripheral projects such as its short-video app Sora and redirected significant investment toward enterprise offerings and its programming assistant Codex, which directly competes with Anthropic’s popular product, Claude Code. Altman even remarked on social media that “Codex feels like it’s having its own ChatGPT moment.” Currently, ChatGPT boasts over 900 million weekly active users, yet OpenAI still faces challenges including unmet internal revenue and user growth targets, as well as the departure or transition to advisory roles of several key executives.
Rivals Are Closing In: Anthropic and SpaceX
OpenAI is not alone; the field it operates in has become exceptionally crowded. A week ago, Anthropic—the developer of the Claude chatbot and OpenAI’s most direct AI rival—announced it had confidentially filed an IPO application with the SEC. In its latest private funding round, Anthropic’s valuation surged to $965 billion, surpassing OpenAI’s valuation for the first time. According to informed sources, Anthropic also anticipates achieving a public market valuation in the trillions of dollars.
More immediate competition comes from SpaceX, Elon Musk’s aerospace and AI conglomerate. Following its merger with xAI, SpaceX is accelerating its narrative around 'orbital data centers,' positioning itself as a provider of AI infrastructure from space. SpaceX filed its IPO registration statement in mid-May and launched its investor roadshow last week, targeting a market debut as early as June 12. Its filings list OpenAI, Anthropic, and Google (GOOGL.US) as 'key competitors' in the AI sector.
According to compiled data, SpaceX’s IPO valuation is expected to be approximately $1.77 trillion, with plans to raise $75 billion. Although Anthropic’s final IPO fundraising size has not been confirmed, market participants widely anticipate it could exceed $60 billion. If OpenAI’s eventual offering is added to the mix, the combined fundraising from these three companies could easily surpass $200 billion, injecting nearly $4 trillion in new market capitalization into the market.
Index Inclusion and Lock-Up Expiry: Dual Tests for Market Supply
Whether the U.S. equity market can smoothly absorb such massive supply has become traders’ foremost concern.
In the short term, passive investment flows through index funds may offer some support. Steve Sosnick, chief strategist at Interactive Brokers, noted that the key lies in how quickly newly listed stocks are included in major indices. Once newly public companies are swiftly added to benchmark indices like the S&P 500 or Russell 3000, ETFs tracking those indices will be compelled to purchase significant quantities, creating initial buying pressure. However, analysts point out that even based on current ultra-high valuation estimates, SpaceX’s initial weighting in the S&P 500 would likely be only around 0.1%, and even under Nasdaq-100 rules allowing up to triple weighting based on free float, its initial weight would still be just about 0.5%. Thus, the actual near-term support from passive funds may be relatively limited.
What markets truly fear is the selling pressure following the expiration of IPO lock-up periods. For instance, SpaceX is expected to have only about 4% of its shares freely tradable at listing. According to its disclosed lock-up schedule, insiders could sell 20% of their holdings after the first quarterly earnings release, with an additional 10% allowed if the share price rises more than 30% above the IPO price. Roughly half of Elon Musk’s personally held shares are subject to a 366-day post-listing sale restriction, while the remainder face earlier expirations. When these massive blocks of shares enter the secondary market in stages, they could exert sustained pressure on supply-demand dynamics.
Historical data also serves as a warning. Research by University of Florida professor Jay Ritter shows that from 1980 to 2024, U.S. IPOs underperformed the broader market by an average of 20 percentage points over the three years following listing. Companies valued at more than 40 times revenue fared even worse, lagging by as much as 58 percentage points. With SpaceX’s valuation nearing $1.8 trillion—over 90 times its annual revenue—such a high valuation multiple implies that even if short-term enthusiasm lifts the stock price, the long-term pressure for valuation correction will be substantial.
Editor /rice