Intended to reserve shares for retail investors! OpenAI moves towards an epic IPO with a valuation exceeding $850 billion.

OpenAI plans to reserve a portion of its shares for retail investors in its highly anticipated initial public offering (IPO). CFO Sara Friar said the San Francisco-based AI giant has been exploring the retail market in a recent financing round and has seen "very strong demand" from individuals. Friar said on Wednesday that OpenAI will definitely reserve a portion of shares for retail investors when it goes public. She said, "Artificial intelligence needs to earn trust in everything we do. This is also a part that attracts me about retail investors. Everyone must be able to participate, not just a few, leaving others behind." She referenced her experience as CFO at Square (now Block), a fintech company that offered a direct sales plan to small business owners and sellers during its IPO. She also highlighted the business model of OpenAI co-founder Elon Musk in Tesla and SpaceX. SpaceX is expected to go public in June, reportedly reserving nearly 30% of its shares for retail investors. Friar said, "Everyone wants to own a piece of a rocket companyI hope everyone also wants to own a piece of ChatGPT. It's helpful when you're a consumer brand." In a recent financing round, OpenAI had planned to raise $1 billion through private placements with banks such as JPMorgan, Morgan Stanley, and Goldman Sachs. Friar said the company ended up raising three times the targeted amount, making it the largest private placement transaction these banks have ever conducted. One bank's system even crashed after opening the data room for investors to review OpenAI's financials. A source recently said that OpenAI has been in communication with investment banks about potentially going public as early as the fourth quarter. Friar declined to comment on the IPO timeline but stated that for a company of OpenAI's scale, observing, performing, and operating like a public company is a "good corporate governance practice." After raising a record $12.2 billion in financing, OpenAI's valuation has reached $852 billion, higher than the $110 billion valuation announced in February. Unlike Silicon Valley companies like Stripe, OpenAI will not stay private indefinitely. Friar said, "At our current scale, relying on equity financing forever doesn't make sense. You need to start reducing your reliance on equity financing step by step." Friar also pointed out another advantage of going public: OpenAI can start using convertible bonds and investment-grade debt to meet its ongoing large-scale computing needs. The company plans to invest $600 billion in semiconductor and data center construction over the next five years. She said, "Computing power is the most important competitive weapon," calling it "the most important asset you can have." She added, "Being able to offer more computing power fundamentally improves the customer experience and brings in more revenue and more cash flow. I want to make sure we are always ready to enter the large capital markets to raise funds." Part of OpenAI's computing strategy comes from serving enterprise clients. Friar and Chief Revenue Officer Dennis DeRosse (formerly CEO of Slack) said this part of the business is expected to contribute half of the company's revenue by the end of this year. DeRosse said, "The enterprise business currently accounts for 40% of our revenue. It is expected to be on par with consumer business by the end of 2026. I have never seen such a level of confidence spread so rapidly and consistently across industries." He added that the fastest-progressing companies have moved from using AI for "traditional productivity enhancement" to "truly managing a team of intelligent agents to perform tasks." He also said the number of Codex users has exceeded 3 million. Friar added that this number was "almost zero" at the beginning of this quarter. It is worth noting that there are differing opinions within OpenAI about the timing of the IPO, with disagreements among senior leadership. Friar has internally stated that given the large scale of preparatory work, including process, compliance, and organizational structure improvements, the company may not be ready to go public before the end of 2026. Friar also expressed concerns about the financial risks OpenAI faces due to its massive investments in computing infrastructure. Predictions show that the company's cash burn could exceed $200 billion before achieving positive cash flow. Friar's cautious stance contrasts with CEO Ottman's. Ottman has expressed interest in pushing for an IPO as early as the fourth quarter of this year. Signs of internal tension have also emergedFriar is reportedly excluded from certain financial discussions, including a recent high-level meeting with major investors on server procurement. Notably, Friar now reports to Fidji Simo instead of reporting directly to Ottman, which is different from the typical CFO reporting structure. Despite these circumstances, both Friar and Ottman have publicly stated that they remain aligned on the company's overall computing strategy.