OpenAI filed its confidential S-1. Here’s why the IPO race could turn brutal

OpenAI just took the first official step toward an IPO. On Monday, the company said it filed its confidential S-1, following in the footsteps of Anthropic, and it puts ChatGPT maker OpenAI in the open season of public-market expectations.

And timing is the entire story here. With SpaceX (including Elon Musk’s xAI) planning to go public later this week, three major AI and AI-adjacent players are now in the process of going public potentially the same year. OpenAI left the door open on its own timing, warning that “it may be a while” before it publicly lists shares. But the filing itself is a public signal even if the pricing date is not public yet. It also forces the industry to shift from private-market life, where information is tightly controlled, into a world of earnings calls, financial disclosures, and the extra weight of regulation that comes with being publicly traded.

So what are “smart people” saying the filing actually means? Start with the idea that this is less about a calm, deliberate transition and more about racing. Dan Ives, a tech analyst at Wedbush Securities, said OpenAI’s filing shows “the floodgates for the IPO market are officially open.” In his view, both OpenAI and Anthropic have recently raised significant amounts of capital, but they are racing to get to market quickly to beat one another out, given the amount of capital both firms are looking to raise.

Translation for the busy executive brain: if you are an AI lab, your IPO is not just about liquidity. It is also about control. Public markets ask for proof on growth rates, burn, and long-term scale, and they do it on a schedule. The faster the other top labs can reach the public stage, the faster investors will build a valuation benchmark. That benchmark then becomes a reference point for everyone else trying to file.

Eric Lee/Bloomberg via Getty Images captured the vibe of the moment for a reason: it is the moment where closed-door experimentation stops being the whole story. Gregory Allen, founder and CEO of Decision Tree Research, called the valuations “extraordinary,” saying these companies are “in the ballpark of a trillion dollars valuation,” and comparing it to an annuity that kicks out “$45 billion a year every year forever.” He also added a reality check: even if companies like OpenAI are expected to lose money this year, “the gross margins in these businesses are extremely favorable.”

That sounds bullish until you read the next line. Allen framed the real risk as timing and cash survival. The question, he said, is whether they can “time the investments correctly” so they make those “hundreds of billions of dollars” in capital expenditure investments, ride revenue growth properly, and do not “run out of cash and go bankrupt.” That is the kind of sentence that matters for boards and CFOs because it turns “AI optimism” into the simplest possible math: how long can you fund the roadmap before the public-market narrative turns into a liquidity story?

Other analysts are leaning into the pressure angle from a competitive standpoint. Nate Elliott, a principal analyst at EMARKETER (a sister company to Business Insider), called it a “precarious moment” for OpenAI. His claim is that OpenAI is about to lose strong early leads in both consumer and enterprise AI. He said Anthropic has generated “incredible momentum” in enterprise, and that EMARKETER forecasts Google will overtake ChatGPT in terms of US AI users by early 2027. Elliott also argued OpenAI “doesn’t have a lot of other places to look for the enormous capital required to support its costs.” He pointed out that OpenAI “has taken almost $200 billion in funding across more than a dozen private rounds,” and suggested the company cannot count on the consumer business becoming self-sufficient soon.

That adds up to a board-level tension: private markets can tolerate long, messy timelines. Public markets usually demand a cleaner path, or at least a clearer explanation of how capital needs will be met. If the consumer engine is not yet self-sustaining and enterprise momentum is contested, then the IPO becomes an accelerant and a stress test at the same time.

Meanwhile, you also have people framing this as industry validation rather than just company pressure. Michael Fertik, founder of Verdict Capital, said he hopes SpaceX’s IPO opens the door “to a gushing torrent of liquidity.” He said he is rooting for Elon Musk, for the IPOs, and for “the OpenAIs and Anthropics.” His argument is that strong debuts could help the US stay ahead in the generative AI race, and he also wants the public to share in the moment because many companies have relied on private markets for so long.

On the competitive chessboard, the “which lab wins” debate is getting sharper. Dan Niles, founder and portfolio manager at Niles Investment Management, told CNBC he views Anthropic more favorably than OpenAI. He argued Google wins in consumer because it has the “complete stack,” and he said Google wins in AI overall. Then he drew the split line for the enterprise market: in corporate, he sees Anthropic as the better fit. Niles said Anthropic reached profitability in Q2 and that its revenues are ramping “like nothing you’ve ever seen in history for a company of that size.” He concluded that OpenAI is “stuck between the two,” making Anthropic and Google the “two winners.”

If you zoom out, even Perplexity CEO Aravind Srinivas, who is not competing on identical footing but still lives in the same investor attention economy, suggested ripple effects could follow if these IPOs do not go well. He said his own company targets 2028 for its IPO. He added that OpenAI, Anthropic, and SpaceX’s IPOs will matter broadly, with “no sugar coating” if they fail to deliver.

One last twist: OpenAI’s chief futurist Joshua Achiam tried to reframe the conversation as a choice between two different visions, not just business models. On X, he wrote a pair of “Vote” messages, one for Anthropic and one for OpenAI, and he dismissed the consumer versus enterprise lens as “unfixably borked.” The point is not whether you agree with the framing. It is that OpenAI leadership knows the IPO discussion will be interpreted through multiple lenses: capital needs, competitive positioning, and even identity narratives around what the tech should optimize for.

For executives at any AI or data-heavy company, this is the strategic stakes: the IPO filing is not simply a legal milestone. It is a declaration that the market will now judge your growth, margins, and cash trajectory in public, while competitors race to set valuation benchmarks first. If you are about to file, this wave tells you the scoreboard is being redrawn fast, and timing might matter as much as product.