Why OpenAI is Scared to Go Public

OpenAI was supposed to go public this year. Now it's not. Here's what that actually means.

Image by Alesia Kozik on Pexels

What Actually Happened

Earlier this month, OpenAI quietly filed paperwork with the SEC to go public. It was supposed to be the IPO of the decade, but then, just weeks later, the company's advisors told it to wait until 2027.

But why?

An IPO (initial public offering) is a private company offering its shares to the public for the very first time. It’s a source of large amounts of capital for a company. When a company goes public, it means opening the company's books to the public, justifying valuations, and answering to shareholders every quarter. In practice, this means public financial disclosures and constant scrutiny from the media and analysts.

The SpaceX Warning

When SpaceX went public, the stock launched at $135 per share and surged 19% on its first day. This made Elon Musk a trillionaire for a brief amount of time. and it was the largest IPO in history. The hype was massive.

But then reality hit. The stock fell 24% over the next six trading sessions, and investors who bought in on the first day were sitting on significant losses within just one week.

This is what OpenAI's advisors are afraid of. SpaceX is one of the most recognizable companies in the world, with real revenue and a dominant position in the space industry, but it fell because the investors got ahead of themselves. After SpaceX had raised $75 billion in its IPO, it announced that it was taking on another $25 billion in debt, which made investors question how much capital the company truly needed, and the stock dropped. SpaceX had also acquired xAI, Elon Musk’s own AI company, in February 2026, taking on a massive AI capital expenditure that further made investors nervous. But if even SpaceX, with real revenue from NASA contracts and Starlink, couldn't hold its IPO gains, what happens when OpenAI goes public with no such safety net and losses running to tens of billions a year? OpenAI has no NASA contracts, no Starlink, no real revenue streams to rely on. The losses have no safety net, and the company is entirely dependent on AI optimism. Unlike OpenAI, SpaceX at least has non-AI core revenue streams to fall back on if that hype cools. OpenAI does not have that luxury.

The Numbers

Here's where it gets uncomfortable. OpenAI had $34 billion in costs and expenses in 2025 while it had $13 billion in revenue. In 2026, it's projected to lose another $14 billion. The company also has a $600 billion infrastructure commitment that stretches to 2030.

Despite all of this, CEO Sam Altman is pushing for a $1 trillion valuation. When his advisors suggested lowering that target to get the IPO done sooner, he just refused. ChatGPT has 900 million active users weekly, and as of April 2026, ChatGPT dominates the generative AI chatbot market and holds 76.85% of the AI search market share. Altman believes that this scale will make OpenAI the backbone of how businesses and firms in the public sector operate. 

A company losing tens of billions of dollars a year, which is demanding to be valued at $1 trillion. That's the situation.

The $1 Trillion Question

Investors are being asked to value a company at $1 trillion, one that loses more money than most countries' GDPs, purely on the bet that AI will eventually be worth it.

Sam Altman's refusal to lower that target tells you exactly how AI companies have been valued for the past few years, and it’s not about what these companies earn, but about what people believe they could earn. That works in private markets where investors are patient, but it definitely gets a lot harder when you must justify it to the public every quarter.

What About Everyday Investors?

When a company like OpenAI goes public, millions of people buy shares too, and this is often because they recognize the brand, use the product, and believe in the technology. That is not a bad reason to invest. It is also not the same as reading a balance sheet.

Retail investors are the most exposed when a hyped stock falls. They don't have the safety nets that professional funds do. When SpaceX dropped 24% in less than a week, it was ordinary people who felt it hardest. OpenAI's delay might be protecting retail investors from the same outcome.

Not Just OpenAI

Anthropic, OpenAI’s closest rival, also filed for an IPO earlier this month, targeting an October 2026 listing at a $965 billion valuation, overtaking OpenAI in valuation for the first time. Both companies are now racing to capture investor capital before the window closes. Whoever goes public first will set the industry narrative and lock in the widest pool of investors. But Anthropic faces the same fundamental problem as OpenAI: the company is burning through cash at a massive rate.

Two of the most valuable AI companies in the world are both trying to go public at the same time, in a market that just watched SpaceX fall 24% from its peak. It's exposing the strengths and weaknesses of the entire AI industry: the strength of user and revenue growth, and the weakness of profitability.

Should OpenAI Wait?

It probably should. The fact that a company demanding a $1 trillion valuation fears what public markets will say about it tells you everything about where AI valuations stand right now.

The excitement around AI isn't going anywhere. But between failed IPO attempts, more questions from public investors, and billion-dollar losses, it just got a lot more complicated.