OpenAI leaders clash over IPO timing as CFO Sarah Friar questions 2026 readiness

OpenAI Leaders At Odds Over IPO Plans | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. According to a report Sunday (April 5) by The Information, CEO Sam Altman has said he wants the IPO to happen as soon as the fourth quarter, even though the artificial intelligence (AI) startup will spend upwards of $200 billion before it begins to generate cash. Meanwhile, Chief Financial Officer Sarah Friar has suggested in-house that the company may not be ready to go public this year, a source who spoke with her told the news outlet. This source said that Friar has also voiced concerns about OpenAI's financial exposure related to steep spending on computing infrastructure. The report also notes some tension behind the scenes at OpenAI, with sources saying that Altman had excluded Friar from conversations with investors and from meetings that involved important financial decisions. Last year, the report added, Friar began reporting to Fidji Simo, the former Instacart chief executive who had been named the CEO of OpenAI's applications business. The Information report includes a statement from both executives, which says: "We are fully aligned that durable access to compute is at the core of OpenAI's strategy and a key differentiator as we scale. We have both been directly involved in every consequential compute decision over the past year plus." The statement added that OpenAI's recent $122 billion funding round "locks in the capacity to scale compute aggressively and positions us to become the core infrastructure layer for AI." Meanwhile, a report Sunday by the Wall Street Journal (WSJ) examines the "Achilles heel" facing both OpenAI and rival Anthropic as they prepare to go public: the high cost of training new AI models. According to that report, OpenAI anticipates it will spend $121 billion on computing power for AI research in 2028. This means the company expects to burn through $85 billion that year even after nearly doubling sales from the previous year. Losses of this scale, the WSJ added, would surpass those of almost any public company on record. Training costs are so high, the report said, that both startups use two measures of profitability: one with training costs, one without. Using the latter metric, OpenAI is on pace to realize a small pre-tax operating profit this year. Using the former, OpenAI won't break even until the 2030s, the report said. An OpenAI spokesperson told the WSJ the company prioritizes growth over profits, and could reduce spending on training but expects a robust return on investment.

OpenAI IPO: CFO Sarah Friar Raises Concerns Over Sam Altman's Plans

She thinks the organisational and procedural work required and the risks emanating from spending commitments may thwart an IPO in 2026 Every time Sam Altman pitches something big, the markets sit up and take notice. In recent times, the OpenAI boss has said and done a few things that appeared to be directly related to an upcoming IPO in 2026. However, his CFO Sarah Friar has now voiced serious concerns over risks and challenges of such a move. Reports of Sarah Friar's concerns was broken by The Information yesterday. It quoted Friar as having told colleagues earlier this year that she wasn't sure that the ChatGPT-maker would be ready for an IPO in 2026. The organisational and procedural work required and the risks emanating from spending commitments may thwart the move. From Altman's point of view, the IPO would arrive as early as the fourth quarter of 2026 and OpenAI already has elaborate plans to spend over $600 billion in the next five years to achieve its business goals. From Friar's point of view, her challenge related to OpenAI's plans to infuse massive amount of money for obtaining AI servers in the coming years, given the slowing down of revenue growth from its customers. This statement is contrary to what OpenAI said in a recent post of hitting $2 billion monthly revenues. These numbers were part of the post that announced OpenAI's most recent $122 billion fundraise at a post-money valuation of $852 billion. "Within a year of launching ChatGPT, we reached $1B in revenue. By the end of 2024 we were generating $1B per quarter. We are now generating $2B in revenue per month." "At this stage, we are growing revenue four times faster than the companies who defined the Internet and mobile eras, including Alphabet and Meta," the post said. Which makes us wonder whether CFO Sarah Friar and CEO Sam Altman were looking at different books while throwing out numbers. In fact, Friar wasn't sure if there would be an IPO in 2026 itself. Her concerns were largely around OpenAI's aggressive spending plans, specifically of its large commitments to secure computing infrastructure. The reports indicated that Friar was concerned about the company's project cash burn, which could go beyond $200 billion before it can achieve positive cash flow. Which leaves questions about the $600 billion it has committed over the next five years towards cloud server capacity and inference power. She also called out the spending plans, given that a substantial part of the recently secured funding is coming from Amazon and Nvidia - both key suppliers of cloud and chip infrastructure to OpenAI. According to the CFO, this overlap among the three players creates a potentially risky capital structure. Amidst these reports of incongruence in the views of the CEO and the CFO comes new reports of internal friction between the two divisions with the CEO's office leaving out the money managers out of major financial discussions. The Information claimed that one such high-level meeting involved a major investor on the topic of server investment. On top of these reports, there are some that indicate that Friar's reporting line has been shifted from Altman to Fidji Simo, the CEO of Applications at OpenAI. In spite of these reports, both the executives have publicly maintained an "all is well" approach around the company's broader strategy and goals. Barely days before these reports around Friar's apprehensions over IPO preparation broke, a significant transition within the leadership suite of OpenAI also came up. Last Friday it was confirmed that Chief Operating Officer Brad Lightcap has a new role, heading special projects and reporting to Altman. There were two other changes as well. Chief Marketing Officer Kate Rouch and the above-mentioned Fidji Simo proceeded on medical leave, raising questions around how the company would handle this period of structural volatility leading up to an IPO. Reports quoting company sources suggest that these changes at the top level are signals towards an intensified focus on special projects within OpenAI. No, we aren't referring to the "side projects" that Fidji Simo had called out while announcing the shutting down of Sora recently. This time round, the company insiders believe that special projects would work to connect with private equity firms to scale the company's enterprise software sales, an area where OpenAI has lots of catching up to do in the wake of arch-rival Anthropic's considerable lead on this path. Post this shift, some of Lightcap's duties would be shifted over to the newly appointed Chief Revenue Officer Denise Dresser. Of course, there is also the single "Super App" project that Fidji Simo had highlighted during her recent blog post. This is OpenAI's attempt to integrate the chatbot with coding and browsing tools. Suffice to say that most of these activities are directly connected to the proposed IPO, especially in the light of reports that arch rival Anthropic too is eyeing a 2026 approach to retail investors. In this context, investors continue to be wary around the health and stability of the leadership teams during the lead-up to an IPO.

OpenAI CFO says company not ready for 2026 IPO, Sam Altman continues to push

Dependence on partners like Microsoft, Amazon, and NVIDIA adds complexity. OpenAI is pushing hard to build the core systems for its next generation of AI, but tensions inside the company are starting to show. A recent report says top leaders at OpenAI disagree on when the company should go public. This lack of agreement is also shaping quiet decisions about money and long term planning. The report adds that Sarah Friar, the chief financial officer, supports a slower approach. She thinks that the IPO might have to wait beyond 2026. The divergent views highlight that despite the progress, some major considerations on timelines and funding are still undecided within OpenAI. Leaders are still discussing the risks, benefits, and market situation. The concern raised by Friar is rooted in preparation as according to her taking a company public requires more than strong growth. It needs stable systems, clear reporting structures, and strict compliance with regulations. According to a report shared by The Information, she feels that much of this work is still in progress, and rushing could create risks later. Also read: Oppo F33 Pro and Oppo F33 launch date leaked: Check expected specs and price At the same time, OpenAI is spending heavily to build its future. The company is investing large amounts in computing infrastructure, which is essential for training and running advanced AI systems. Estimates suggest that its total cash burn could go beyond $200 billion before it reaches a stage of steady profit. Moreover, it is important to note that OpenAI plans to invest more than $600 billion in five years in cloud resources. This shows the nature of competition within the artificial intelligence market, yet sustainability remains uncertain. The second concern is the way in which OpenAI will finance itself since the majority of the $122 billion fundraising round will involve its partners such as Amazon and NVIDIA. These companies are not just investors but also suppliers, which could make financial decisions more complex. Also read: Apple iPhone 17 Pro Max price drop: Get over Rs 10,400 discount, here is how Furthermore, the company's strong link with Microsoft is also under focus as while the partnership has helped OpenAI grow, any disruption could directly affect its operations. Reports also suggest that Friar was not included in some key financial meetings. In a notable shift, she now reports to Fidji Simo instead of directly to Altman.