As the AI boom continues, talk of a potential OpenAI IPO is accelerating in the United States. This talk accelerated recently after a report by Reuters showed that the company was preparing for a $1 trillion IPO at the second half of 2026. This article explores some of the top reasons why the ChatGPT maker may not launch an IPO soon.
OpenAI IPO filing could happen in 2026
In a recent report by Reuters, the company was preparing to file documents for its IPO in the second half of next year.
For a company recently valued at over $500 billion, this would be the biggest IPO ever. Indeed, the Reuters report predicted that OpenAI will be valued at over $1 trillion when it launches its IPO, a move that will make it one of the biggest companies in the world.
It will also be the first pure play company to launch its IPO, a move that will open doors for other companies like Anthropic and Elon Musk’s xAI to go public.
According to the Reuters report, the company’s CFO is aiming for a 2027 IPO, but some insiders believe that it may come earlier. Still, there are some reasons why this IPO may not happen in 2026.
OpenAI lead against rivals is shrinking
One of the main reasons why the OpenAI IPO may not happen in 2026 is the fact that competition is catching up on the company.
Google’s Gemini has become one of the most lethal competitors after it launched its newest model recently. According to the FT, the number of Gemini’s app users has jumped to 650 million from 450 million in May this year.
This growth, together with the development of its Tensor chip, has helped the Google stock price to surge to a record high, with its market capitalization crossing the important $4 trillion level.
Other companies like Anthropic, xAI, and Perplexity AI will likely continue gaining market share, putting pressure on OpenAI, a move that may prevent it from going public soon.
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OpenAI has a profitability problem
The other main reason why the OpenAI IPO may not happen any time soon is that the company has become a cash incinerator, a process that may continue for years.
OpenAI reported a $5 billion loss in 2024, and a $4.7 billion loss in the first half of the year. Analysts expect that its losses will continue mounting as the company embraces a ‘growth at all costs’ approach.
A recent report by HSBC estimated that the company will remain in the unprofitable category until 2020 and that the company will need an additional $207 billion to fund its ambitions.
In the report the authors noted that the company was confronting a multitude of issues, including soaring infrastructure costs and rising competition.
Therefore, the company may wait a bit to improve its results before going public. For one, if the IPO happens at a time when its growth is slowing and losses are rising, there is a risk that the stock will crash, erasing billions of dollars in value.
Valuation concerns remain
Additionally, there are concerns that the private sector valuation metrics for OpenAI have overextended in the past few years.
For example, the company received a $157 billion valuation in October last year, a figure that has now jumped to $500 billion, and one that is expected to hit $1 trillion in its IPO filing.
These are all big numbers for a company whose growth trajectory is slowing and one whose competition is rising. Also, it is a big number for a company whose cash burn is continuing.
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