OpenAI’s continued push toward a 2026 initial public offering (IPO) may not be so persistent after all, according to comments apparently given anonymously to The Wall Street Journal’s Berber Jin and Corey Dribush. It seems that OpenAI is being advised to tone down until next year.
A Journal report from Jin earlier this week said OpenAI—which is private, and not required to publicly report revenue—missed its recent revenue targets.
In their new profile of Sarah Fryer, OpenAI’s chief financial officer, Jin and Driebusch wrote that Fryer has:
“[…]OpenAI has taken a close look at its spending commitments, and privately suggested waiting until 2027 for an IPO, warning that the company is not yet ready to meet the rigorous reporting standards required of public companies.
The Journal compared Fryer to other women in Silicon Valley who are famous for taming defiant male founders: Facebook Chief Operating Officer Sheryl Sandberg, who famously made Facebook (later Meta) a profitable business, and SpaceX adult Gwynne Shotwell. It is also reported that he oversaw the IPO of Jack Dorsey’s payments company Square, and that Square’s stock dropped 10% shortly after his resignation.
Fryer also oversaw a SPAC-enabled change in public company status at Nextdoor (the stock “plunged”, according to the Journal). It should also be noted, Fryer oversaw Nextur’s devastating round of layoffs in 2023, with 25% of its workforce being let go. The following year he moved from Nextdoor to OpenAI.
The company she joins is under immense pressure to become nothing less than a world-leading company that aligns technology and the global economy with its vision. Confidence in its ability to realize that vision is currently more shaky than it was after it rose to fame in the wake of ChatGPIT’s release.
OpenAI needs revenue as it spends money in world-historical fashion. A report based on internal documents late last year put OpenAI’s commitment to spend $1.4 trillion over eight years on data centers into somewhat dire context: It was set to lose $74 billion in 2028 alone, the same year its main rival, Anthropic, was on track to break even, thanks to its rapid build-up of revenue-generating enterprise customers.
According to a new report from the Journal, banks are openly telling OpenAI and Anthropic they are in a winner-take-all race for IPO glory. As the Journal writes, he said “whoever brings it to market first will have the chance to define a new industry.”
But the same Journal reports that in “recent months” Fryer has reportedly begun to express concerns, and has sought to stem the cash outflow on OpenAI’s data centers in the absence of higher revenues. Worse, he has implicitly suggested that the company may need to put the brakes on its IPO, even though CEO Sam Altman has insisted on an accelerator.
Google’s recent earnings call painted a rosy picture of AI-derived revenues, with that side of its business contributing a respectable $20 billion, which is additional troubling news for OpenAI.
The Journal apparently heard from an OpenAI spokesperson, who claimed that OpenAI did indeed achieve its revenue targets for the first quarter of the year, and that its targets are known only internally. These targets are different from what the company’s investors are aware of, the spokesperson said clearly.
In a request for comment sent to OpenAI, Gizmodo asked for clarity about what it told the Wall Street Journal and a statement about this story generally. OpenAI did not immediately respond on Saturday, but we will update this article if we hear back.
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