OpenAI accelerates toward September IPO after Musk lawsuit dismissed
OpenAI is returning to preparations for its initial public offering (IPO) after Elon Musk's lawsuit against the company was dismissed the day before. According to internal sources reached by TechCrunch, the IPO could take place in September 2026; it would be the largest tech IPO on US exchanges in the past 10 years.
Musk's lawsuit had alleged that OpenAI's transition from its non-profit status to a for-profit 'capped-profit' structure was unlawful. The suit also questioned CEO Sam Altman's leadership and the company's financial relationship with Microsoft. On Tuesday, a San Francisco federal court dismissed all claims in the suit.
Following the ruling, OpenAI's management team reaffirmed the September IPO target. The IPO, in which Goldman Sachs, Morgan Stanley and JPMorgan act as lead underwriters, is expected to value the company at between $600 billion and $800 billion. That valuation is 20 to 60 percent above the $500 billion figure applied in the company's most recent private funding round.
The draft S-1 document for the IPO has already been filed with the SEC (US Securities and Exchange Commission). Unknowns include the share proportion to be offered in the IPO (estimated at 5 to 10 percent), the dual-class share structure to be used, and lock-up period durations for existing investors.
OpenAI's annual revenue run-rate is currently around $18 billion. Paid ChatGPT subscribers number around 320 million, API revenues are around $5 billion and the enterprise ChatGPT Enterprise product generates around $4 billion annually. The company is profitable on gross margins but, due to heavy GPU and data centre investments, is still reporting a net loss.
Microsoft is the largest investor in OpenAI (approximately $30 billion) and continues to be its compute infrastructure provider via Azure data centres. Microsoft's stake is estimated to drop to around 25 to 30 percent post-IPO, though the partnership agreement runs through 2030.
Altman is planning a 'dual-class voting share structure' to retain control after the IPO. The structure allows the Class A shares sold to the public to carry one vote each, while Class B shares held by founders and early investors carry 10 or 20 votes each. That is similar to the IPO structures used by Google, Meta and Snap.
The dismissal of Musk's lawsuit also amounted to a psychological clean-up for the IPO. Many institutional investors who had avoided the deal are now firming up their pre-IPO orders. Early demand from tier-one hedge funds is running at around five to eight times the IPO supply — a historically very strong demand signal.
On the regulatory side, the US Federal Trade Commission (FTC) had been examining the close relationship between OpenAI and Microsoft. The FTC is now expected to conclude that review before the IPO. The European Commission is also examining OpenAI's compliance under the AI Act framework; still, there is no mechanism directly blocking the IPO.
The September window is a hard target for IPO success. Historically, tech IPOs are not done in the summer months because investor participation is low; September and October are typically the annual windows. If September is missed, the next suitable window would be November or February 2027. The OpenAI team is expected to reach its final review sessions with the SEC over the next three to four weeks.