OpenAI Restructures for Potential IPO as Microsoft Backs with $13 Billion

OpenAI's Chief Financial Officer, Sarah Friar, indicated that the company's restructuring goals might pave the way for a possible future initial public offering (IPO). However, such decisions would rely heavily on both the public market conditions and the company's readiness.

Microsoft, a prominent investor, has allocated over $13 billion to OpenAI. Last December, OpenAI revealed a plan to transition its profit-driven arm into a public benefit corporation (PBC). This structural shift aims to balance shareholder returns with societal goals, distinguishing itself from traditional nonprofit organizations which focus solely on public interest.

Earlier this month, OpenAI, known for developing ChatGPT, revised its initial plan, allowing its nonprofit parent entity to retain control over the PBC and become its major shareholder. This adjustment permits the profit-focused arm to continue attracting investments, which is pivotal for maintaining a competitive edge in the artificial intelligence sector.

Speaking at the Dublin Tech Summit, Friar remarked, "The PBC structure provides us with the potential for an IPO... if we ever choose to pursue it." She humorously cautioned attendees, "Please don't tweet that Sarah Friar announced OpenAI is definitely going public—I didn't. I only mentioned that it's a possibility."

When questioned about the prerequisites for OpenAI considering an IPO, Friar emphasized that any company aiming to go public requires two fundamental conditions: its own preparedness and a receptive market environment. "Even if you're completely ready, if the market isn't prepared, you're unfortunately out of luck," she explained. "That's why it's crucial to establish a company capable of sustainable and secure operations regardless of market fluctuations or the availability of IPO opportunities."

She further added that, to become a public entity, "a certain level of predictability is essential." Although the market may tolerate some unpredictability, particularly during high-growth phases, "it fundamentally dislikes uncertainty."