OpenAI Isn’t Yet Working Toward an IPO, CFO Says
Sarah Friar said the AI giant could reach break-even quickly and would like government backstop on data-center investments
- OpenAI’s CFO stated an IPO is “not on the cards” currently, prioritizing growth and R&D over immediate profitability.
- The company seeks government support to guarantee financing for AI chips, reducing costs and increasing debt capacity.
- OpenAI could achieve profitability quickly by reducing aggressive investments, due to “very healthy” gross margins.
OpenAI Chief Financial Officer Sarah Friar said that an IPO is “not on the cards” for the company in the near term, throwing a dose of cold water on what could become one of the largest public listings in history.
Speaking at The Wall Street Journal’s Tech Live conference, Friar said the AI giant’s conversion to a new structure doesn’t portend an imminent public offering as the company prioritizes growth and R&D over profitability.
“IPO is not on the cards right now,” Friar said. “We are continuing to get the company into a state of constantly stepping up into the scale we are at, so I don’t want to get wrapped around an IPO axle.”
The company has discussed a public listing as soon as 2027, The Wall Street Journal reported.
As OpenAI ramps up its spending on data center capacity to unheard of levels, the company is hoping the federal government will support its efforts by helping to guarantee the financing for chips behind its deals, Friar said. The depreciation rates of AI chips remain uncertain, making it more expensive for companies to raise the debt needed to buy them.
“This is where we’re looking for an ecosystem of banks, private equity, maybe even governmental, the ways governments can come to bear,” she said. Any such guarantee “can really drop the cost of the financing but also increase the loan-to-value, so the amount of debt you can take on top of an equity portion.”
Friar said OpenAI could reach profitability on “very healthy” gross margins in its enterprise and consumer businesses quickly if it weren’t seeking to invest so aggressively.
“I’m not overly focused on a break-even moment today,” she said. “I know if I had to get to break-even, I have a healthy enough margin structure that I could do that by pulling back on investment.”