OpenAI IPO Filing Nears as Musk Lawsuit Clears Path

OpenAI is on the cusp of a landmark initial public offering, with sources confirming that the artificial intelligence giant has engaged Goldman Sachs and Morgan Stanley as lead underwriters. A confidential draft prospectus could be submitted to the U.S. Securities and Exchange Commission as soon as May 23, according to the Wall Street Journal. The move marks a pivotal moment for the AI industry and comes on the heels of a significant legal victory for the company.

Legal Hurdle Cleared

The IPO push accelerated after a federal jury in San Francisco dismissed Elon Musk's $150 billion lawsuit against OpenAI on May 19. The lawsuit, which challenged OpenAI's conversion from a nonprofit to a for-profit entity, was dismissed on procedural grounds—jurors ruled that Musk had filed the case too late. Musk, who co-founded OpenAI in 2015 and left in 2018, has vowed to appeal, posting on X that the jury ruled on a "calendar technicality" and did not address the substance of his allegations. He further claimed that OpenAI's founders "enriched themselves by stealing a charity." Despite Musk's threats, the dismissal removes a major overhang that could have complicated the IPO process and investor appetite.

Valuation and Market Sentiment

OpenAI currently carries a private valuation of approximately $852 billion based on its most recent funding round. However, secondary market trading on Forge Markets suggests even higher expectations: shares were trading at $735 each as of May 20, up more than 46% over the past three months and 120% over the prior year. The implied valuation on that marketplace reaches approximately $906 billion, reflecting strong investor demand for a piece of the company behind ChatGPT and GPT-4. The IPO is expected to be one of the largest technology listings in history, drawing comparisons to Meta and Alibaba.

Regulatory and Market Considerations

The confidential filing process allows OpenAI to test the waters with regulators without immediate public disclosure. However, the company faces scrutiny over its complex corporate structure, which includes a nonprofit parent and a for-profit subsidiary. Regulators may also probe issues around data privacy, AI safety, and competitive practices. The IPO timing remains subject to market conditions, but the engagement of Goldman Sachs and Morgan Stanley signals confidence in a smooth process. Analysts note that the AI sector has seen a surge in investor interest following the explosion of generative AI applications, and OpenAI's public debut could catalyze further investment in the space.

The company's statement that its "focus remains on execution" suggests that internal priorities—such as product development and scaling—take precedence over the IPO timeline. Nonetheless, the legal clarity from the Musk lawsuit dismissal and the strong secondary market performance create a favorable window for going public. If the filing proceeds as expected, OpenAI could be trading on a major exchange by late 2026 or early 2027.

Key Takeaways

1. OpenAI plans confidential IPO filing as soon as May 23 with Goldman Sachs and Morgan Stanley as underwriters.
2. Elon Musk's $150 billion lawsuit dismissed on procedural grounds; appeal expected.
3. Private valuation ~$852B; secondary market implies ~$906B valuation.
4. IPO could be one of the largest tech listings ever, subject to regulatory and market conditions.
5. Legal clarity and strong investor demand create favorable conditions for going public.

Sources: Wall Street Journal, CoinMarketCap Academy, Forge Markets.