OpenAI to set aside some IPO shares for retail investors

OpenAI to set aside some IPO shares for retail investors

OpenAI, the company behind ChatGPT, plans to reserve a portion of its upcoming initial public offering (IPO) shares for retail investors.

The move was revealed by CFO Sarah Friar in an interview with CNBC.

This comes after the company's recent funding round saw really strong demand from individual investors.

Typically, retail investors get only a small percentage of shares in IPOs, but OpenAI is looking to change that trend.

OpenAI's IPO plans

OpenAI is preparing for an IPO that could value it at as much as $1 trillion.

The company may file with securities regulators in the second half of 2026, Reuters reported last year.

Friar did not comment on the timeline but said it's good hygiene for a company of OpenAI's size to look and feel and act ... like a public company.

Record funding round

In its latest funding round, OpenAI raised over $3 billion from individual investors. The round closed with a post-money valuation of $852 billion and $122 billion in committed capital.

Initially, the company aimed to raise $1 billion from individual investors through private placements via banks like JP Morgan, Morgan Stanley, and Goldman Sachs.

However, it ended up raising three times that amount in their largest private placement ever.

Changing trends in IPO allocations

Traditionally, large institutional investors have been the main beneficiaries of IPO allocations.

Retail investors usually get only 5% to 10% of shares in public offerings.

However, this trend may be changing as more companies are looking to give retail investors a bigger slice of the pie.

SpaceX, for example, plans to allocate as much as 30% of its upcoming IPO to individual investors.