Why OpenAI Needs an IPO

The elite circle of the world’s most valuable private companies face a steady chorus of will-they-or-won’t-they IPO chatter from investors and bankers (and me). It helps to cut through the rumors by thinking through the reasons why a company might want or need to go through the expensive ritual (lawyer fees, new scrutiny, dealing with the Securities and Exchange Commission…) of going public.

Many of those elite companies have been able to push off public listings as long as possible for a specific set of reasons. Either they have become so profitable that they can afford to buy back employees’ shares themselves (Stripe and ByteDance), or they can attract private capital with ease (Databricks), or some combination of the two (SpaceX).