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Can OpenAI do anything simply? Many companies, when publicly acknowledging the possibility of an IPO, emphasize that the final decision will depend in part on “market conditions.” That’s what OpenAI’s rival Anthropic did last week. But the ChatGPT firm chose to be more cryptic. Revealing its confidential IPO filing on Monday, OpenAI said it might hold off on its debut for a while “because there are things we want to do that are likely easier as a private company.”
That very well may be obfuscation—the Nasdaq has fallen 5% over the past week, including 1% on Tuesday, so market volatility presumably looms large in the thinking of OpenAI’s management and advisers. Otherwise, what could OpenAI be talking about? It’s no secret that tech entrepreneurs often hold off on an IPO because they want the flexibility to build a business—often by making long-term and costly bets—without the scrutiny and pressure of the public markets. But if that was a worry for OpenAI CEO Sam Altman, he’d probably never go public at all.
When you ask ChatGPT what a private company can do more easily than a public one, it lists “long-term investments” and then “changing strategy quickly,” which OpenAI has definitely done already, but very publicly. The third factor ChatGPT cites is “keeping information confidential”—that ship has sailed. So what exactly is it Altman wants to do that he hasn’t already done?
Even an acquisition shouldn’t stop OpenAI from a public listing—just look at SpaceX, which is going public later this week. It’s doing so months after swallowing up one of Elon Musk’s other companies and after taking an option to buy Cursor for $60 billion. Chances are OpenAI isn’t really ready to go public but doesn’t want to be left out of the confidential IPO filing scene—it’s cool to have filed confidentially! Maybe executives are worried about the stock market. Or maybe it’s both.
Software’s Defense
Private equity mogul Orlando Bravo declared on CNBC on Tuesday that the “SaaSpocalypse is over,” arguing that AI is going to benefit software firms rather than undercut them. (Bravo’s firm, Thoma Bravo, owns many software companies, including Anaplan and Medallia).
Marc Benioff agreed with Bravo—the Salesforce CEO retweeted the Bravo interview in an X post. Someone had better tell public market investors! Salesforce stock is down roughly 34% for the year so far, ServiceNow is down 30% and Asana is down 45%. And we haven’t seen the impact yet from any of the big IPOs—SpaceX, Anthropic and OpenAI—that will likely prompt investors to dump weaker tech stocks in favor of those with better growth prospects.
Bravo’s logic might be right. But that won’t necessarily save the public stocks of many big software firms.
In Other News
• Broadcom said Tuesday it is launching a new fund—backed by Apollo and Blackstone—to help finance more than 20 gigawatts of AI data centers through 2028, including projects tied to Anthropic and OpenAI, using chips it has designed.
• SpaceX’s Starlink is hitting new roadblocks with regulators in India over concerns about how its satellite internet service has been used in the Iran war, Bloomberg reported on Tuesday.
• The U.S. Department of Defense on Monday added more than a dozen Chinese tech companies including Alibaba and Baidu to a blacklist, a move that could further escalate tensions between the world’s two largest economies.
Today on The Information’s TITV
Check out today’s episode of TITV in which we unpack what Apple’s Worldwide Developers Conference, held this week, tells us about the company’s AI strategy.
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