They need to financially engineer a good looking quarter beforehand.
Perhaps Larry Ellison can cut them a nice quid pro quo for a few months to make OpenAI look profitable (like the SpaceX/Anthropic deal), although that's probably unlikely given the debt Oracle is taking on to build it's infra.
I understand the scepticism around Google's deal with SpaceX, given the former holds a stake in the latter. But Anthropic buying SpaceX's compute doesn't have any related-party smell to it. That genuinely looks like SpaceX having cornered some valuable compute.
I'm actually talking about both. WSJ publishes Anthropic artificial profitability. Days later the reason for the profitability appears in SpaceX S-1. Both are going public. It's a quid pro quo.
When Anthropic spends on xAI, it benefits Google. When google spends on xAI, it benefits Google. When xAI spends on Google, believe it or not, that benefits Google.
This is how a Ponzi -style circular financing scheme typically works.
> When Anthropic spends on xAI, it benefits Google
Unless Google is directing these transactions, this is not a novel issue. (We see a similar effect with mutual funds owning most companies [1]. It's a weak effect.)
> This is how a Ponzi -style circular financing scheme typically works
No. It's potential conflicts of interest. It's not circular financing. Circular financing follows the cash. When NVIDIA invests in OpenAI so OpenAI can buy NVIDIA chips, that is circular financing.
Anthropic basically did that by getting two months of free compute from SpaceX. As I recall, this is how they were able to claim that they were profitable. But in reality, they are only profitable for those two months.
1) In order to fund research - this stuff costs 10s of billions of dollars - everyone, from Ilya, to Elon, to Sam - all agreed that they would require a profit-arm to raise money. Nobody was going to sponsor that 10s of billions of dollars to a non-profit.
2) The non profit is still there - and controls the commercial element.
I find the irony delicious that this S1 will be fed into ChatGPT so often looking for flaws and edge cases that the LLM will develop sentience just to tell people to stop…
OpenAI CEO Sam Altman pitched the idea of turning over shares in his company to Trump in early 2025 and discussed the matter again with senior officials in recent weeks
What was that Warren Buffett's quote about everyone trying to leave the party seconds before midnight in a room where there are no clocks? I think it was at peak of the dot com bubble
I'm just anticipating the next version of “Community-based EBITDA" that sama rolls out in the latest attempt to convince everyone that spending >$1 to earn $1 is a good idea.
SpaceX IPO is slated to be $75-80bn — the market has size for that. We also have seen robust options and finance markets for AAPL and NVDA over the last years that make the broader ecosystem not overly worrying in my armchair opinion.
I’m not clear how much crossover demand there is between SX and Anthropic/oAI — that seems like the more interesting question. I’m guessing if we had Anthropic/oAI launching at the same time we’d see some pretty interesting capital dynamics.
> if we had Anthropic/oAI launching at the same time
Don't we have exactly that? There are S-1 announcements for SpaceX, Anthropic, and OpenAI. Google is selling to raise money for infra (IIRC). There's an absurd amount of money flowing in at present (prospectively at least).
None of these companies are worth the numbers being tossed around, but SpaceX especially so.
Its Schrodinger's IPO: the space business is so successful how could you question the company's worth? You can't afford to miss out on the next biggest AI business to invest in!
What's going to happen is the music will stop and it's just a question of who cashed in when it does. OpenAI are easily the most vulnerable here.
They expect someone to leak that they had submitted it, so they’re just saying it themselves. I don’t think they mean that the actual contents (like financial projections and all that) will be leaked.
Growing worry I have are the dozens of newly minted corporate elites that will continue to wreck havoc on the tech industry mandating their golden paths while America still lacks medicare for all, college for all, and universal childcare.
If you think Sam Altman is bad for the industry, imagine what 200 of him will be like!
We had universal childcare until we converted single-income families into dual-income families in order to make the boomers who they bought houses from rich.
Women want their own income stream because of the innumerable ways men get into trouble. If her man gets into trouble, she wants a plan B, for her and her children. I don't think anyone was thinking about how that would prop up the housing market 30 years later.
No one has full agency over their life. The men who generally work harder, longer, and for more of their lives, that are shorter as a result, don't have fully agency. Having a boss isn't agency.
"We want to be ready to grift public money at a moment's notice, but there are still opportunities to grift private money right now, so we are holding off."
“Under the JOBS Act, it has been possible since April 2012 for ‘emerging growth companies’ to file a Form S-1 on a confidential basis, only making the contents public 21 days prior to the road show for the IPO” [1]. Since 2017 and 2025 it’s been available to basically all companies [2].
Withdrawing an IPO looks bad. Confidential filing lets issuers start and have the option to abort the process without taking reputational damage. (The specifics of OpenAI’s filing, and any back and forth with the SEC, remains confidential.)
Once it no longer is being drafted—and agreed upon by all parties to meet the needed regulatory standards—it will become final and be publicly published.
The SEC needs to review it before approving a company to go public at all. It’s targeted at investors but they need to clear it, ask questions, demand changes, etc.
Companies IPOing should be forced to put up their estimated market cap as collateral in cash. Oh what is that? You don't have $1 trillion in cash to put up? Cool, you're not a $1 trillion dollar company then.
This makes no sense. Market cap and cash reserves are two different stats for a reason. Why would they need to be the same? Just to make things simpler for people who don't actually know what market cap means? (Which, granted, is the vast majority of people.)
This makes no sense: the whole point is to raise capital. The valuation is never just the current value of the assets; it’s based on the expected future cash flows. A good example is in biotech, some researcher developed a treatment and wants to develop a product. They have valuable IP but zero money. So they IPO to raise capital to bring the treatment to market. The investors expect that in the future, they will get dividends or a buyout.
If a company that wanted to IPO had 1 trillion dollars, their market cap would have to be larger than their cash holding. Their cash on hand is considered or at least should be considered in any normal valuation of the company. Because shares are ownership of the company.
So a simple valuation would be something like
Current Cash + Assets + Expected Future cash - (Expenses + Risk)
Where would a company ever get their market cap in cash? If they had that, wouldn’t they by definition have a higher market cap, since the value of the company is cash + the rest of the company?
> since the value of the company is cash + the rest of the company?
Failing companies sometimes trade below cash value. OP's basically creating a rule by which only failing companies are allowed to go public. (Or those who have paid a king's ransom to a megabank.)
Last year Chegg was trading below net cash (meaning their market cap was smaller than cash in the bank minus debt). Might still be, I haven't checked in a while. There were maybe a hundred on the Tokyo stock exchange trading below net cash.
Presumably those things were harder as a charity/non-profit.
Perhaps Larry Ellison can cut them a nice quid pro quo for a few months to make OpenAI look profitable (like the SpaceX/Anthropic deal), although that's probably unlikely given the debt Oracle is taking on to build it's infra.
I understand the scepticism around Google's deal with SpaceX, given the former holds a stake in the latter. But Anthropic buying SpaceX's compute doesn't have any related-party smell to it. That genuinely looks like SpaceX having cornered some valuable compute.
When Anthropic spends on xAI, it benefits Google. When google spends on xAI, it benefits Google. When xAI spends on Google, believe it or not, that benefits Google.
This is how a Ponzi -style circular financing scheme typically works.
Unless Google is directing these transactions, this is not a novel issue. (We see a similar effect with mutual funds owning most companies [1]. It's a weak effect.)
> This is how a Ponzi -style circular financing scheme typically works
No. It's potential conflicts of interest. It's not circular financing. Circular financing follows the cash. When NVIDIA invests in OpenAI so OpenAI can buy NVIDIA chips, that is circular financing.
[1] https://insights.som.yale.edu/insights/the-rise-of-the-mutua...
Eh given the quality of recent IPO proposals I think they can just say there's a couple zillion air molecules to turn into gold and be done with it.
(Actually the subsidiary is everything and the nonprofit is a do-nothing fig leaf but the IRS and Congress seem to not care enough to stop them.)
How is this not illegal? What prevents any nonprofit from doing this to sidestep its filing status and extract profit?
1) In order to fund research - this stuff costs 10s of billions of dollars - everyone, from Ilya, to Elon, to Sam - all agreed that they would require a profit-arm to raise money. Nobody was going to sponsor that 10s of billions of dollars to a non-profit.
2) The non profit is still there - and controls the commercial element.
That will be especially untrue after IPO when shareholders can claim there are fiduciary responsibilities that conflict with the non profit goals.
The for-profit has fiduciary responsibility to the non-profit as well as other shareholders. The IPO doesn't really change that.
The non-profit hasn't controlled squat since they tried and failed to fire Sam Altman.
How much has MacKenzie Scott donated to non-profits again?
Seems like such a claim is on thin ice.
The for-profit (OpenAI Group PBC) is what's filing the S-1 Draft.
The OpenAI Foundation also exclusively appoints the board of the OpenAI Group PBC and can replace directors at any time.
https://openai.com/our-structure/
(I work at OpenAI, but I am not a lawyer and am not speaking on behalf of OpenAI - just sharing my personal understanding.)
https://www.notus.org/technology/trump-blindsided-ai-compani...
OpenAI CEO Sam Altman pitched the idea of turning over shares in his company to Trump in early 2025 and discussed the matter again with senior officials in recent weeks
I’m not clear how much crossover demand there is between SX and Anthropic/oAI — that seems like the more interesting question. I’m guessing if we had Anthropic/oAI launching at the same time we’d see some pretty interesting capital dynamics.
Don't we have exactly that? There are S-1 announcements for SpaceX, Anthropic, and OpenAI. Google is selling to raise money for infra (IIRC). There's an absurd amount of money flowing in at present (prospectively at least).
Its Schrodinger's IPO: the space business is so successful how could you question the company's worth? You can't afford to miss out on the next biggest AI business to invest in!
What's going to happen is the music will stop and it's just a question of who cashed in when it does. OpenAI are easily the most vulnerable here.
The I in AGI has always stood for IPO.
What?
If you think Sam Altman is bad for the industry, imagine what 200 of him will be like!
Is there a chart, somewhere, like a family tree, of what the Apple and Microsoft stock "ordinary millionaires" went on to do?
“Under the JOBS Act, it has been possible since April 2012 for ‘emerging growth companies’ to file a Form S-1 on a confidential basis, only making the contents public 21 days prior to the road show for the IPO” [1]. Since 2017 and 2025 it’s been available to basically all companies [2].
Withdrawing an IPO looks bad. Confidential filing lets issuers start and have the option to abort the process without taking reputational damage. (The specifics of OpenAI’s filing, and any back and forth with the SEC, remains confidential.)
[1] https://en.wikipedia.org/wiki/Form_S-1
[2] https://www.sec.gov/about/divisions-offices/division-corpora...
Once it no longer is being drafted—and agreed upon by all parties to meet the needed regulatory standards—it will become final and be publicly published.
Interest in the SpaceX, Anthropic, and OpenAI IPO is already dropping
So a simple valuation would be something like Current Cash + Assets + Expected Future cash - (Expenses + Risk)
Failing companies sometimes trade below cash value. OP's basically creating a rule by which only failing companies are allowed to go public. (Or those who have paid a king's ransom to a megabank.)
your suggestion makes no sense