An IPO is traditionally thought of as a way to raise capital in amounts that are not available privately, but more recently IPOs are just a way to transfer vast amounts of wealth from speculating retail and institutional investors to stakeholders. The IPO itself is the least interesting thing: if Microsoft wanted they could avoid the IPO and instead offer to buy the shares beforehand.

If the financial future of OpenAI is not as rosy as they say it is then there is a fair chance that post IPO the stock will not rise. There are plenty of signs that this is the case, including the 'erotic' version of ChatGPT slated for release in December, the strong push to monetize even the most inane interactions and the mention of advertising as a possible source of income. All of those combined tell me that OpenAI is seriously worried about their bottom line.

But Microsoft already has a bottom line and AI is the one way in which they could put one over on Google, which they've been dying to do for many years.

So the logical progression to me seems to be:

- do the IPO, everybody associated with OpenAI will be filthy rich (including MS)

- attempt to polish up the financials

- if that fails activate plan B, have Microsoft make an offer to take OpenAI private again

The hype around this IPO increases the chance the stock will drop post IPO.

Spitballing

There is no clear path to the trillion dollars today. By IPOing, the owners (who have a good idea of where it's going) can exchange their ticket to the trillion for cash today.

Seems like a bad deal unless you know the ticket won't get called. Then you've just made bank.

And you might have noticed some form of hype around AI these last few years - arguably this could be to make the trillion dollar seem more realistic and therefore making the owners more money when selling their ticket to it.

Probably predicting either pop of AI bubble like dotcom in 1999 or the OpenAI emperor has no clothes and the marker sees its shrunk hunk.