OpenAI Submits S-1 Draft to SEC(openai.com) |
OpenAI Submits S-1 Draft to SEC(openai.com) |
Interest in the SpaceX, Anthropic, and OpenAI IPO is already dropping
“Under the JOBS Act, it has been possible since April 2012 for ‘emerging growth companies’ to file a Form S-1 on a confidential basis, only making the contents public 21 days prior to the road show for the IPO” [1]. Since 2017 and 2025 it’s been available to basically all companies [2].
Withdrawing an IPO looks bad. Confidential filing lets issuers start and have the option to abort the process without taking reputational damage. (The specifics of OpenAI’s filing, and any back and forth with the SEC, remains confidential.)
[1] https://en.wikipedia.org/wiki/Form_S-1
[2] https://www.sec.gov/about/divisions-offices/division-corpora...
Once it no longer is being drafted—and agreed upon by all parties to meet the needed regulatory standards—it will become final and be publicly published.
So a simple valuation would be something like Current Cash + Assets + Expected Future cash - (Expenses + Risk)
Failing companies sometimes trade below cash value. OP's basically creating a rule by which only failing companies are allowed to go public. (Or those who have paid a king's ransom to a megabank.)
your suggestion makes no sense
Presumably those things were harder as a charity/non-profit.
Perhaps Larry Ellison can cut them a nice quid pro quo for a few months to make OpenAI look profitable (like the SpaceX/Anthropic deal), although that's probably unlikely given the debt Oracle is taking on to build it's infra.
I understand the scepticism around Google's deal with SpaceX, given the former holds a stake in the latter. But Anthropic buying SpaceX's compute doesn't have any related-party smell to it. That genuinely looks like SpaceX having cornered some valuable compute.
Eh given the quality of recent IPO proposals I think they can just say there's a couple zillion air molecules to turn into gold and be done with it.
(Actually the subsidiary is everything and the nonprofit is a do-nothing fig leaf but the IRS and Congress seem to not care enough to stop them.)
How is this not illegal? What prevents any nonprofit from doing this to sidestep its filing status and extract profit?
1) In order to fund research - this stuff costs 10s of billions of dollars - everyone, from Ilya, to Elon, to Sam - all agreed that they would require a profit-arm to raise money. Nobody was going to sponsor that 10s of billions of dollars to a non-profit.
2) The non profit is still there - and controls the commercial element.
That will be especially untrue after IPO when shareholders can claim there are fiduciary responsibilities that conflict with the non profit goals.
How much has MacKenzie Scott donated to non-profits again?
Seems like such a claim is on thin ice.
The non-profit hasn't controlled squat since they tried and failed to fire Sam Altman.
The for-profit (OpenAI Group PBC) is what's filing the S-1 Draft.
The OpenAI Foundation also exclusively appoints the board of the OpenAI Group PBC and can replace directors at any time.
https://openai.com/our-structure/
(I work at OpenAI, but I am not a lawyer and am not speaking on behalf of OpenAI - just sharing my personal understanding.)
Isn't it hard to write this with a straight face?
The corporation selling shares is subject to normal corporate tax regime
The real answer to your question is that non profits can own shares, and there is no legal difference between passive investment of other publicly traded companies and highly consolidated shares of a private company. In the US it is seen as merely happenstance that we have such a liquid market where the shares themselves can rapidly change in value and create profits, but there is nothing controversial about that.
https://www.notus.org/technology/trump-blindsided-ai-compani...
OpenAI CEO Sam Altman pitched the idea of turning over shares in his company to Trump in early 2025 and discussed the matter again with senior officials in recent weeks
Elon is 100% a for profit person, it's just a 10 year rivalry between Sam and Elon.
i think that we are going to see another leg up but this is gonna be it for a while
Having said that, it’s the company I have least faith in due to the recent acquisition of xAI / Twitter.
Pension funds are rarely passively run. They tend to be sophisticated investors. For example, several pension funds are already investors in SpaceX.
NASDAQ 100 will include SpaceX after a couple weeks. But it's a tech fund. It's strange to complain about buying the largest tech company in a tech fund. Similarly, S&P total market and Russell total market will buy early. But again, those are total-market funds. If you want to actively manage your portfolio, don't buy total-market funds.
These capitalists are taking advantage of the corrupt administration in charge at the moment (not that a blue admin would be that much better), but they can get away with almost everything at the moment. Keep your head on a swivel, the billionaire class knows they don't have to worry about going to jail for the next few years and they'll make sure to screw everyone they possibly can to satisfy their endless greed.
Death to the fascist insect that feeds on the blood of the people.
Once the SEC declares a registration statement "effective," the company is subject to the Exchange Act's reporting requirements. Theoretically one can do this and not list one's shares. That's dumb, so nobody does it.
In practice, we'll get a couple weeks to possibly days ahead of the listing. That process is partly governed by the SEC accepting the company's S-1. It's mostly down to negotiations between the company, its underwriters and IPO investors.
I’m not clear how much crossover demand there is between SX and Anthropic/oAI — that seems like the more interesting question. I’m guessing if we had Anthropic/oAI launching at the same time we’d see some pretty interesting capital dynamics.
The I in AGI has always stood for IPO.
What?
If you think Sam Altman is bad for the industry, imagine what 200 of him will be like!
Is there a chart, somewhere, like a family tree, of what the Apple and Microsoft stock "ordinary millionaires" went on to do?
There wasn't. A consultation was rejected. It happens all the time. If S&P management had a say, they would have wanted SpaceX included.
The for-profit has fiduciary responsibility to the non-profit as well as other shareholders. The IPO doesn't really change that.
The media and market is hyping these three companies up to be all trillion dollar companies.
Don't we have exactly that? There are S-1 announcements for SpaceX, Anthropic, and OpenAI. Google is selling to raise money for infra (IIRC). There's an absurd amount of money flowing in at present (prospectively at least).
Its Schrodinger's IPO: the space business is so successful how could you question the company's worth? You can't afford to miss out on the next biggest AI business to invest in!
What's going to happen is the music will stop and it's just a question of who cashed in when it does. OpenAI are easily the most vulnerable here.
Altman and Thiel are also gay, so theres that too.
Also: Altman is married.
And last I checked, plenty of tech billionaires are married and by no stretch of the imagination stupid.
Nothing was blocked. S&P 500 never adopted them. Influencers misunderstood what a consultation document is and presented a question as a fait accompli.
NASDAQ 100 changed its rules, as did S&P and Russell's total-market funds. But for NASDAQ 100 I'm going to go ahead and say this was a brilliant market move, since nobody ever talked about that index before this.
Yes. For their total-market fund. That makes sense. (CRSP is probably the most-significant index to make the change. But even then, it won't be a significant source of demand. Total market means lots of components.)
It can easily be that, if they believe that the capital it raises increases the long-term value of the company by a greater multiple than the proportion of the company that is lost from the nonprofit to outside investors.
The primary example of this is Novo Nordisk (the Ozempic company). Their largest shareholder is, through an intermediary, the Novo Nordisk Foundation, which is one of the largest charities in the world. Nordisk used to be a charity that owned 100% of it's own labs and facilities, but in 1989 they realized that they were just too small, and would get trampled by larger international players without greatly increasing their scope. So they made their subsidiary go public (through a complex merger, not an IPO), and now only own 28% of it, instead of 100%. But, in large part because of the capital that going public brought them, despite constantly distributing money for research and charity, that's 28% of a company that's more than 100x bigger that what they used to be. And they retained 77% voting control.
If the private subsidiary was doing semi-unrelated stuff to the goals of the non-profit, and using it to fund the non-profit, then your logic could make sense - for example if a cancer research charity owned a profitable business and funnelled the profits up to spend on research, great.
But in OpenAI's case, the claimed goals of the non-profit were essentially "do AI in a way that puts safety above profits". And whether or not one agrees with their previous approach to safety, or even whether safety needs to be cared about, it's undeniable that the for-profit business isn't acting as useful fundraising for the non-profit's goals, it's literally acting in the opposite direction.
It's not up to your or to me, it's up to the donors to the non-profit. If what you find to be undeniable is very much deniable to them, then that is their right.
The only question of public concern is whether OpenAI, Inc., a charity, meets the exemption requirements [1].
[1] https://www.irs.gov/charities-non-profits/charitable-organiz...
The rule is that the nonprofit and disqualified persons (mostly board members), cant own businesses together, well they can but not more than 35% of it together, and a max of 20% can have voting capability
The consequences arent immediate, non profits have 3 years to correct this
Now in the tech industry, getting VCs involved is already the plan from day one and founders get diluted, so getting below 35% is either easy, or easy within 3 years
so they’re fine
there’s a lot of things they can all do to deal with the share consolidation
This is a reasonable accusation! It doesn't make a lot of sense–the Journal article is worth a hell of lot more than SpaceX referencing Anthropic's profitability. And we have zero evidence for it–one could raise this accusation against any compute partner Anthropic were to buy from.
This is literally true for any revenue. Treat the buyer and seller as a single company and their transaction is internal.
That's nice way to say "invested in AI that turned out to be flop nobody wants to pay for so they are selling spare capacity"
Both takes are true. xAI invested in capacity that was supposed to yield frontier-model-maker margins. Grok failed to generate enough interest. So now they're selling it.
That's absolutely a good business, in a way that's more certain than the frontier-model one. But it's also lower margin, which doesn't support the sort of valuation SpaceX is going for.
Data centers (before recently) are low margin businesses because all the inputs are commodities: you buy power (joules), power (PDU), cooling hardware, physical racks, etc.. from the same vendors as everyone else. Worse, your biggest potential clients have the scale to just build it on their own and cut you out because of their scale and because you don't bring anything unique (outside of maybe physical proximity to an interesting market)
xAI has all the same commodity inputs plus another huge upfront capital expense (GPU/storage/networking), and their customer base is exclusively the well-funded companies who would normally just build it on their own.
I assume that they can't get better deals from nvidia than (e.g.) Microsoft because of their scale, so the unit cost of their inputs is the same or worse than their clients.
So the whole game is hoping that they hope to charge more now because people can't build fast enough and try to recoup their upfront costs before either a) other capacity comes online and b) the installed hardware becomes obsolete.
I'm being earnest -- it seems like they're trading one tiny margin service (datacenter) for another tiny margin service, with the added difficulty that there's an additional 10 figures of upfront expenditures and their viability depends solely on paying everything off before the price floor drops. Maybe it's staunching the bleeding, but it seems like not a great move
When Anthropic spends on xAI, it benefits Google. When google spends on xAI, it benefits Google. When xAI spends on Google, believe it or not, that benefits Google.
This is how a Ponzi -style circular financing scheme typically works.
Unless Google is directing these transactions, this is not a novel issue. (We see a similar effect with mutual funds owning most companies [1]. It's a weak effect.)
> This is how a Ponzi -style circular financing scheme typically works
No. It's potential conflicts of interest. It's not circular financing. Circular financing follows the cash. When NVIDIA invests in OpenAI so OpenAI can buy NVIDIA chips, that is circular financing.
[1] https://insights.som.yale.edu/insights/the-rise-of-the-mutua...
Google has a fantastic balance sheet with or without these investments. None of the recent deals have uniquely enabled an IPO. So they'd be playing to increase their stakes' value by a few points ahead of a dump, a dump that would almost certainly wipe out much more than they'd stand to gain by trying to make someone else a dollar so they get nickels and dimes out of it.
Reasonable. The influencers who just learned the term circular financing are mostly idiots. The ones pointing out the conflict of interest with Google are technically correct, but the conspiracy takes so many moving parts to yield such little gain that it would have to be particularly stupid in vision yet competent in execution to pull off.
But asking if there is a quid pro quo between Anthropic and SpaceX? Like, there could be. We have no evidence of it. The S-1 mention doesn't make any sense. But they're both going public and if I were a journalist I'd look into it.
The base case, that there is commercial value to xAI's datacenters that folks in the frontier-model space are competing to get access to, does seem to be one folks here are actively rejecting.