OpenAI files confidential S-1 with SEC: an AI IPO of a size the market has not seen

After years of speculation, OpenAI's path to a public offering took a concrete step. As The Verge reports, the company has filed a confidential S-1 with the United States Securities and Exchange Commission. The move, a much larger continuation of the step Anthropic took a few weeks earlier, marks the AI sector's first full-scale encounter with the public markets process.

A confidential S-1 is a filing route under the JOBS Act open to companies that meet specific revenue tests or qualify as emerging growth companies. Companies can run investor outreach and the SEC comment process privately at first; the final version becomes public roughly 21 days before the offering.

According to a Wall Street Journal report confirmed by The Verge, OpenAI aims to go to market at a valuation of around $500 billion. That figure sits in the upper-middle range of recent secondary market trades. A company spokesperson told The Verge that OpenAI was looking for the right moment depending on market conditions; no firm date or size was confirmed.

The architecture of the filing is closely tied to OpenAI's structural overhaul of its capped-profit model in recent years. The company completed its move from the capped-profit structure to a more classic C-Corp framework in late 2025; that transition played a defining role in opening up the conditions for a public offering.

Anthropic's similar S-1 step a few weeks earlier had been seen as the horizon event for the sector. According to The Verge, Anthropic's IPO is expected to be valued in the range of roughly $150 billion. OpenAI is targeting nearly three times that figure. Both processes have the potential to structurally alter the AI weight of the S&P 500.

On the regulatory side, the SEC and the FTC have tightened oversight of revenue definitions, shared cost allocations and compute-capacity commitments at major AI companies in recent months. The Verge's analysis says OpenAI's S-1 is expected to disclose its deep cloud arrangement with Microsoft and that this disclosure will become one of the most important items in the debate over revenue quality.

Visible risk factors include OpenAI's cost structure being heavily dependent on Nvidia, AMD and bespoke data-centre arrangements. The company will also need to disclose compliance obligations driven by the European AI Act and the potential financial impact of copyright lawsuits. The timing of the cases brought by The New York Times and several publishers is particularly notable.

For institutional investors, OpenAI's IPO could be the largest technology IPO in years. Saudi Arabia's PIF, Mubadala, Singapore's GIC and Kuwait's KIA are reported as prominent sovereign wealth funds expressing demand. How retail investors will access shares has not yet been disclosed; the lock-up structure is likely to be aggressive.

For distribution-channel partners, OpenAI's IPO becomes a test environment for the public-market readiness of the AI sector. A successful offering would signal that the IPO door has opened for major AI companies that still rely on private capital; a failed one would reignite the high-valuation-late-revenue debate around the sector.

Overall, the S-1 filing is being viewed as more than just one company going public. It is being seen as a maturity test for the AI market itself. As The Verge stresses, the sector's first large encounter with the equity markets could shape the AI financing order for the next decade. This is not investment advice.