OpenAI Is Going Public in 2027. It's Already Losing More Money Than It Makes.

On Wednesday afternoon, August 19, OpenAI CFO Sarah Friar gathered the company's employees for an all-hands meeting and delivered a message designed to settle the question everyone in Silicon Valley has been asking: when does the most valuable AI startup in history finally hit the public markets? The answer, she told them, is 2027. Or sooner, if "our business continues to inflect."

The commitment is real. OpenAI submitted a confidential S-1 registration statement to the SEC on June 8th — the same mechanism companies use when they want to begin the IPO process without tipping off competitors or markets. What Friar did on Wednesday was confirm that the clock is running.

But attached to that timeline are a set of numbers that make OpenAI's path to Wall Street look like one of the most peculiar financial stories in recent memory.

The Case for the Bull

First, the good news. OpenAI's business is growing at a pace that would make most software companies envious. In Q2 2026, the company posted $6.7 billion in revenue — up 18% from Q1's $5.7 billion. Better still, the momentum appears to be accelerating: Friar told employees that the company's revenue run rate is up 35% so far this quarter, with enterprise specifically running 50% ahead of last quarter's pace.

The product diversification is also starting to show up in the numbers. OpenAI's AI coding and work productivity tools now serve 20 million weekly active users. That's not a side project. For comparison, GitHub Copilot took years to build to similar scale. OpenAI got there in months.

Friar framed the IPO not as a celebration, but as a practical tool. "The IPO is not a finish line, it is a milestone, another fundraise," she said. The company raised $122 billion in its March 2026 round at an $852 billion post-money valuation — giving it, in Friar's words, "a lot of flexibility." An IPO would give it more.

The Uncomfortable Math

Now the harder part.

In Q2 2026, OpenAI posted an operating loss of $12.3 billion. That number is not a typo. On $6.7 billion in revenue, the company spent — and lost — $12.3 billion. In Q1, the operating loss was $9.3 billion. The losses are growing roughly $3 billion per quarter, a pace that outstrips even the impressive revenue growth.

To state it plainly: for every dollar OpenAI brings in, it currently spends approximately $2.83. The gap is not narrowing in absolute terms; it is widening.

This puts OpenAI in territory that will be unfamiliar to most public market investors. Amazon famously operated at thin or negative margins for more than a decade, eventually becoming one of the most profitable companies on earth. But Amazon's losses were never multiples of its revenue; they were slivers. The model OpenAI appears to be betting on is that compute costs will fall — through better hardware, better training efficiency, and economies of scale — while revenue climbs on the back of a product ecosystem that has already crossed a billion weekly active users across its platforms.

The Anthropic Problem

Friar also acknowledged what is rapidly becoming a competitive reality that cannot be ignored. Both OpenAI and Anthropic have confidential S-1s filed with the SEC. Both are racing toward the public markets. And in Q2, Anthropic crossed $11.6 billion in revenue — surpassing OpenAI for the first time.

Friar was characteristically measured about it. "We are confidentially under file, and Anthropic is also under file. There is a chance they pull the cover off that confidential file in the coming weeks and become public in September. That's OK, we are running our own race."

What she didn't say, but every investor in the room is surely calculating, is that Anthropic also turned its first-ever profit in Q2 — a milestone reported widely this week. The company that OpenAI's founders helped create now sits in a structurally different position ahead of its IPO: generating more revenue, no longer burning cash at scale, and potentially reaching the public markets first.

For OpenAI, which invented the transformer-based large language model paradigm that launched this entire industry, watching a rival cross the profitability line first is a striking inversion.

A Pause Before the Books Open

There is one more detail worth noting. Alongside the IPO news, reports emerged that OpenAI has initiated a safety review pause on reinforcement learning training — a "safety hardening" period — and that its largest planned frontier model training run remains on hold.

Pausing expensive training runs has an obvious side effect: it reduces operating costs temporarily. Whether this reflects genuine safety diligence, financial conservatism ahead of the IPO disclosure period, or both, is a question the S-1 will eventually have to address.

What to Watch

OpenAI's IPO, whenever it comes, will be one of the defining financial events in AI history. An $852 billion valuation implies that investors already believe the company's losses are transient, that its revenue will compound, and that it will find a path — through subscriptions, APIs, enterprise contracts, advertising, or something not yet invented — to margins that justify the number.

Those are not crazy assumptions. The technology is real. The user base is real. The revenue trajectory is real.

But the losses are also real. And if Anthropic goes public first — profitable, growing faster, with a cleaner financial story — the pressure on OpenAI's IPO narrative will be considerable.

Friar was right about one thing: this is not a finish line. It might be more like the starting gun.

Sources

CNBC — OpenAI IPO timing could be 2027, CFO Sarah Friar tells employees (Aug. 19, 2026): https://www.cnbc.com/2026/08/19/open-ai-ipo-timing-2027-friar.html

PYMNTS — OpenAI CFO Tells Employees Public Debut Coming by 2027: https://www.pymnts.com/news/artificial-intelligence/2026/openai-cfo-tells-employees-public-debut-coming-by-2027/

BigGo Finance — OpenAI IPO timing and financial outlook: https://finance.biggo.com/news/dc8d35da-cb1a-4be6-a1cd-f317c25eeb92

Cryptopolitan — OpenAI Could Go Public Before 2027 If Business Continues to Inflect: https://www.cryptopolitan.com/openai-could-go-public-before-2027-if-business-continues-to-inflect-cfo-friar-tells-staff/

Shopifreaks — OpenAI CFO Sarah Friar Says the Company Will Be Public in 2027: https://www.shopifreaks.com/openai-cfo-sarah-friar-tells-employees-the-company-will-be-public-in-2027-and-that-anthropic-listing-first-is-no-problem/