OpenAI may not be delaying its initial public offering (IPO) because the market isn’t ready — it may be waiting because investors can’t seem to stop raising the price tag.
Willy Lee, principal at SuRo Capital Corp. (NASDAQ:SSSS), a publicly traded venture capital firm that owns stakes in OpenAI, Canva, Whoop and Lime, said OpenAI has little incentive to rush into an IPO if investors continue assigning richer valuations in the private market.
“I think the valuation is much higher than that,” Lee said in a prepared statement, referring to OpenAI’s last funding-round valuation.
OpenAI’s Employee Tender May Hold The Answer
According to Lee, the clearest indication of OpenAI’s current valuation may come from its ongoing employee tender offer rather than an IPO filing.
“OpenAI is actually testing that right now with their employee tender, and I’m not sure if all the employees at OpenAI want to sell shares at last round valuation,” Lee said.
Lee believes the tender could reveal that private investors are willing to pay substantially more than OpenAI’s previous valuation, reducing the urgency for the ChatGPT maker to tap public markets.
If private capital continues to value OpenAI at higher levels, waiting until 2027 could allow the company to command an even larger valuation when it eventually lists.
Private AI Companies Are Seeing Rapid Revenue Growth
Lee also argued that the public market has yet to fully appreciate how quickly leading private AI companies are growing.
“In the private markets, we are seeing massive revenue increases year over year for some of these companies,” he said.
He pointed to cloud infrastructure provider CoreWeave, Inc. (NASDAQ:CRWV) as an example, noting that when SuRo invested in 2024, the company had remaining performance obligations of roughly $15 billion. Today, Lee said companies are signing individual AI infrastructure deals of comparable size, highlighting the pace of enterprise AI spending.
“Meanwhile, we’re seeing massive valuation increases because we have that line of sight and people in the public markets haven’t had that opportunity yet,” Lee said.
For Lee, the reported IPO delay should not necessarily be viewed as a warning sign. Instead, he believes it reflects the strength of the private AI market, where surging revenue growth and rising valuations continue to give companies like OpenAI flexibility over when—and at what valuation—they eventually choose to go public.
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