OpenAI Moves Closer to IPO: A Guide to Investing in Their Stock

Key Points

• OpenAI confidentially filed its IPO registration with the SEC on June 8, 2023, marking a significant step toward going public.

• Microsoft is OpenAI’s largest outside investor, primarily holding a 27% stake valued at approximately $245 billion.

• Investors looking to gain exposure to OpenAI can also consider Robinhood’s Venture Fund I, which recently added $75 million in OpenAI assets.

OpenAI has taken initial steps towards its IPO by filing confidentially with the Securities and Exchange Commission. While the exact date of the IPO remains uncertain, the company indicated it may take a significant amount of time before proceeding. This reflects broader trends in 2023, expected to be a record year for IPOs, with notable companies like SpaceX already entering the market.

Microsoft, which has a deep-rooted partnership with OpenAI, has invested a total of $13 billion, including $12 billion beyond its initial $1 billion commitment. This investment represents about 8.5% of Microsoft’s total market cap, reflecting the high valuation of OpenAI at approximately $910 billion. Additionally, Microsoft benefits from a revenue share agreement with OpenAI through 2030.

For investors looking to invest in OpenAI without waiting for the IPO, Robinhood’s Venture Fund I offers a promising opportunity, having invested significantly in OpenAI. However, potential investors should consider fee structures and volatility associated with closed-end funds.