OpenAI IPO Collapse?
OpenAI needs a staggering sum to survive through 2030, rival Anthropic is already turning a profit, and Chinese AI is undercutting American models on price. A failed IPO could detonate valuations across the entire tech industry.
IPOs tied directly to the AI industry are being delayed. SoftBank, one of the largest financiers of AI projects, is paying unexpected premiums on its debt. AI data centers are being delayed at a rate that threatens AI adoption across business, government, and personal levels. OpenAI faces questions about the viability of funding losses that could exist until the end of the decade.
SB Energy, owned by SoftBank and an AI infrastructure builder, has delayed its IPO, the New York Times reported. Holtec Nuclear, which makes small nuclear reactors, appears likely to delay its public offering. SoftBank is raising $10 billion but will need to pay junk-bond rates. Depending on duration, it must pay interest rates ranging from 8.75% to 9.875%, Bloomberg reported. Goldman Sachs issued a report that said AI debt funding has hit $575 billion so far in 2026.
According to several sources, local laws and ordinances have blocked construction of over 500 data centers. A Gallup poll showed 70% of Americans do not want data centers where they live. If this slowdown in building out AI capacity continues, there is concern that AI use will automatically be capped.
OpenAI faces several threats as it moves toward an IPO that observers think will happen early next year. Rival Anthropic plans to go public in late 2026. If the Anthropic IPO stumbles, OpenAI faces a skeptical market. That alone could delay its IPO plans.
OpenAI and Anthropic face competition from US-based companies, which include Meta (NASDAQ: META | META Price Prediction) and Alphabet’s (NASDAQ: GOOG) Google. A larger threat, however, is from China’s AI products. They cost customers much less to use. They may not be as powerful as their American counterparts. Companies using AI have found that spending 80% less on Chinese AI works, because they may not need to build the world’s most advanced applications. And Chinese AI appears to be catching up to OpenAI and Anthropic’s best models.
Although the figure has changed more than once, OpenAI probably needs $280 billion to fund itself between today and 2030. Its annual revenue run rate was recently pegged at $40 billion. That is well behind Anthropic’s run rate. And Anthropic has started to make money.
What happens if OpenAI cannot go public? It devalues the entire industry. That includes the public companies which have high valuations because AI is at the center of their growth forecasts.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
