On April 9, CNBC reported that OpenAI plans to reserve a portion of its shares for individual investors in its highly anticipated and potentially sensational initial public offering (IPO).
OpenAI CFO Sarah Flair stated that the company tested the waters with retail investors in its latest funding round and experienced “extremely strong demand” from individual investors.
In an interview with CNBC on Wednesday, Flair said that OpenAI will “definitely” reserve a portion of its shares for retail investors during its IPO.
“Artificial intelligence needs to earn trust in everything we do. That’s one of the reasons I value retail investors so much,” Flair said. “It has to be accessible to everyone, not just a select few who benefit while everyone else is left behind.”
She cited her experience as CFO of Square (now Block), where the fintech company launched a direct subscription program for small business owners and merchants during its IPO. She also cited the models of Tesla and SpaceX, founded by OpenAI co-founder Elon Musk, as examples.
SpaceX is reportedly expected to go public as early as June, and there are reports that it will reserve nearly 30% of its shares for retail investors.
“Everyone wants to own a stake in a rocket company—I want everyone to own a stake in ChatGPT. As a consumer brand, that would be a huge boost,” said Fryer.
In its recent funding round, OpenAI raised $1 billion (approximately RMB 6.872 billion at current exchange rates) from individual investors through banks including JPMorgan Chase, Morgan Stanley, and Goldman Sachs.
Fryer revealed that the final fundraising amount reached three times its target, setting a record for the largest private placement ever by these banks. One bank’s system even crashed after it opened its data access room to investors to view OpenAI’s financial data.
Sources recently told CNBC that OpenAI has been in talks with investment banks and could launch its IPO as early as the fourth quarter of this year. Fryer did not comment on the IPO timeline but stated that given OpenAI’s current size, “benchmarking, preparing for, and implementing the standards of a publicly traded company in all aspects” is “good management practice.”
Following its record-breaking $122 billion funding round, OpenAI’s valuation rose to $852 billion (approximately 5.86 trillion yuan at current exchange rates), significantly higher than the $110 billion valuation announced in February. Unlike Silicon Valley companies like Stripe, OpenAI will not remain private indefinitely.
“At our current size, endless equity financing makes no sense,” she stated, adding that companies need to gradually reduce their reliance on equity financing.
She also pointed to other advantages of going public, saying that OpenAI can leverage convertible and investment-grade bonds to meet its ever-growing demand for computing power. The company has planned to invest $600 billion in semiconductors and data centers over the next five years.
“Computing power is a core competitive advantage,” Fryer called it “the most important asset a company can own.” “Being able to provide more computing power essentially optimizes the user experience, leading to more revenue and cash flow. I want to ensure we are always ready to connect with major capital markets,” she said.
Part of OpenAI’s computing power strategy focuses on serving enterprise customers. Fryer and Chief Revenue Officer Dennis Dreseer (former CEO of Slack) stated that this business segment is expected to contribute half of the company’s revenue by the end of this year.
“Currently, the enterprise business accounts for 40% of our revenue, and we expect it to be on par with consumer revenue by the end of 2026,” said Dreseer, who has been with the company for just 90 days. “I have never seen such rapid and sustained adoption of a technology in the industry.”
Dreiser stated that leading companies in the industry are no longer using AI merely for “traditional productivity improvements,” but rather “truly managing a group of intelligent agents to accomplish various work tasks.”
She also revealed that Codex’s user base has now surpassed 3 million. Fryer added that this number was almost zero at the beginning of the quarter.
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