Key Points
OpenAI originally planned to go public in late 2026, but it now looks like that won't happen until 2027.
A $40 billion loan that SoftBank took out to support its OpenAI investment comes due in March 2027.
SoftBank wants OpenAI to IPO on schedule so that it can sell some of its shares to pay back the loan.
The past few years have been slow for initial public offerings -- up until Space Exploration Technologies (NASDAQ: SPCX), aka SpaceX, had its historic IPO last month. It was the largest IPO in stock market history, with the company receiving an initial valuation of $1.77 trillion.
That company's filing may have been the domino that set the momentum in motion for several other highly anticipated IPOs that are now in the works, including OpenAI's. The ChatGPT creator has been one of the most influential companies in the AI boom, and its CEO, Sam Altman, wants it valued as such. According to the confidential S-1 the company filed with the Securities and Exchange Commission, Altman is seeking a valuation of $1 trillion for OpenAI, but not everyone is on the same page.
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Two companies, two diverging goals
OpenAI recently filed paperwork for its IPO, but advisors were not convinced that the company could (or should) fetch the trillion-dollar valuation that Altman is set on receiving. The company was essentially presented with two options: Go public later this year at a lower price target and at a market cap of less than $1 trillion, or delay the IPO until 2027, when the company would be better positioned to command a 10-figure valuation.
For Altman, a trillion-dollar valuation isn't a nice-to-have milestone; it's non-negotiable. The problem, however, is that not everyone is on the same page as he is -- most notably, SoftBank, which is OpenAI's second-largest investor.
SoftBank took out a $40 billion "bridge loan" to support its investment in OpenAI, and it's required to repay it by March 25, 2027. For SoftBank, this wasn't an issue at first because the assumption was that OpenAI would go public this year. That would make it easier for the holding company to cash out of its investment and comfortably repay the loan. Now, that plan seems to be in jeopardy.
Regardless of when OpenAI IPOs, SoftBank's loan is due next March. Altman and OpenAI have the luxury to wait to schedule the IPO until it can fetch the valuation he's seeking. SoftBank, though, will need to come up with the cash one way or another.
Show me the money, not just ambitions
OpenAI's operations are very costly, to say the least. It requires tons of data, expensive hardware for its data centers (that consistently need updating), and loads of electricity to keep the operations running. And although OpenAI's revenue tripled from 2024 to 2025, its losses grew even more rapidly. Last year, it booked an operating loss of nearly $21 billion.
The quandary that OpenAI and SoftBank find themselves in points to a larger transition in the current AI boom. For years, AI companies have been able to use venture capital money to subsidize their operations, but now, the trend is reaching the point where investors want to see returns on their investments.
Private and public companies operate differently, but we've seen AI hyperscalers -- such as Amazon, Microsoft, and Alphabet -- face similar backlash from investors over the huge sums they are spending on data center infrastructure, because they're not yet delivering concrete near-term returns on those investments.
However, OpenAI has the upper hand in its situation, and I don't see Altman or the company changing their current stance.
Stefon Walters has positions in Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.