OpenAI to offer retail investors IPO shares in upcoming debut, reports CFO

OpenAI intends to allocate a portion of shares to retail investors in what is likely to be a landmark stock market debut.

The Chief Financial Officer, Sarah Friar, informed CNBC that the artificial intelligence (AI) leader from San Francisco, initiated retail testing in its latest funding round and experienced "strong interest" from individuals.

OpenAI will "definitely" reserve a part for retail investors when it becomes publicly listed, Friar declared to CNBC on Wednesday.

"AI must build trust in everything we do. That's partly why retail resonates with me," Friar explained. "We must ensure everyone participates, so it's not just a small group benefitting while others miss out."

She reflected on her tenure as CFO of Square, now Block, highlighting how they offered direct sales to small business owners and sellers during its IPO.

She also referenced OpenAI cofounder Elon Musk's approach with Tesla and SpaceX.

SpaceX aims to go public by June and is expected to allocate about 30% of shares for individual investors.

"People are eager to own part of a rocket company — I hope there's similar enthusiasm for ChatGPT. Being a consumer brand certainly helps," Friar expressed.

OpenAI aimed to gather $1 billion from individual investors via private offerings with banks such as JP Morgan, Morgan Stanley, and Goldman Sachs in its recent round.

The firm ultimately secured triple that sum in the most substantial private placement those banks have facilitated, according to Friar.

One bank's system even failed when they opened up access for investors to review OpenAI's data and financials.

OpenAI has been in discussions with bankers about a public listing as early as the fourth quarter, according to sources who communicated with CNBC.

Friar did not provide details on the timeline but emphasised the importance of a company of OpenAI's magnitude maintaining "good business practices" similar to a public company.