OpenAI targets $1T valuation by 2026 despite $11.5B quarterly losses

OpenAI CEO Sam Altman confirmed the company is preparing for an initial public offering that could value the ChatGPT maker at up to $1 trillion, with potential filings as early as the second half of 2026. The move comes as OpenAI faces mounting quarterly losses estimated at $11.5 billion while targeting $20 billion in annual revenue, highlighting the company’s need for capital to fund Altman’s ambitious AI infrastructure plans.

What you should know: OpenAI is positioning itself for what Reuters calls potentially “one of the biggest IPOs of all time” despite significant financial challenges.

• The company has discussed raising $60 billion at the low end in preliminary talks, referring to how much money would be raised by selling shares to investors.
• Chief Financial Officer Sarah Friar has reportedly told associates the company targets a 2027 IPO listing, though some financial advisors predict 2026 could be possible.
• An OpenAI spokesperson cautioned that “an IPO is not our focus, so we could not possibly have set a date.”

The financial picture: OpenAI’s revenue growth is being overshadowed by massive operational losses that exceed half of its expected annual revenue.

• The company expects to reach about $20 billion in revenue by year-end, according to people familiar with its finances.
• Microsoft’s earnings filing revealed that its 27% share of OpenAI losses reduced Microsoft’s net income by $3.1 billion in the quarter ending September 30.
• This suggests OpenAI lost approximately $11.5 billion during that quarter alone, as calculated by The Register, a tech news publication.

Why this matters: Going public would give OpenAI more efficient access to capital and enable larger acquisitions using public stock, essential for financing Altman’s plans to spend trillions on AI infrastructure.

• The IPO preparations follow a restructuring completed October 28 that reduced OpenAI’s reliance on Microsoft while maintaining nonprofit oversight.
• OpenAI was most recently valued around $500 billion in private markets, meaning a $1 trillion valuation would represent a doubling of its worth.

Who else benefits: A successful IPO could deliver substantial gains for major investors who have backed OpenAI’s rapid growth.

• Microsoft, which has committed $13 billion in investments and owns about 27% of the company, stands to benefit significantly.
• Other major stakeholders include SoftBank, a Japanese investment firm, Thrive Capital, and Abu Dhabi’s MGX sovereign wealth fund.
• Under the new structure, the OpenAI Foundation maintains control with a 26% stake in OpenAI Group plus warrants for additional shares based on milestones.

What they’re saying: Altman emphasized the capital-intensive nature of OpenAI’s mission during his Reuters livestream appearance.

• “Going public is the most likely path for us, given the capital needs that we’ll have,” Altman stated on Tuesday.
• The company maintains it is “building a durable business and advancing our mission so everyone benefits from AGI.”