OpenAI’s $1 Trillion IPO Gamble: Can It Win the AI Arms Race Against China?

OpenAI, the company behind ChatGPT, is preparing for what could become the largest initial public offering in history—targeting a market value of $1 trillion. This bold move comes after the company completed a major restructuring on October 28, 2025, transforming itself from a nonprofit-controlled entity into a more traditional for-profit corporation.

The timing couldn’t be more significant. As American AI companies pour billions into research, Chinese competitors like DeepSeek are proving they can build comparable systems for a fraction of the cost. This development has turned the AI industry into what many experts now call an arms race between global superpowers.

From Nonprofit to Profit Machine

OpenAI started in 2015 as a nonprofit research lab with a mission to ensure artificial intelligence benefits humanity. But developing cutting-edge AI requires massive amounts of money—far more than a nonprofit structure could handle. The company made its first major shift in 2019 by creating a “capped-profit” subsidiary, which allowed outside investors to earn limited returns.

The latest restructuring goes much further. OpenAI’s for-profit arm is now called OpenAI Group PBC (Public Benefit Corporation), while the original nonprofit became the OpenAI Foundation. This new setup removes the profit caps that previously limited investor returns, making the company far more attractive to Wall Street.

The OpenAI Foundation still maintains control and holds equity currently valued at approximately $130 billion. Microsoft, OpenAI’s biggest partner and investor, secured a 27% stake worth around $135 billion. The tech giant has invested $13.8 billion to date and has already seen a nearly 10x return on that investment.

The Road to a Record-Breaking IPO

While no official date has been set, sources familiar with the matter say OpenAI could file paperwork with regulators as early as the second half of 2026. The company’s Chief Financial Officer Sarah Friar has reportedly mentioned 2027 as a target, though market conditions could push it earlier.

The planned IPO would raise at least $60 billion, though the final amount could be significantly higher. At a $1 trillion valuation, OpenAI would be worth as much as Warren Buffett’s Berkshire Hathaway. To put this in perspective, the company expects to generate $20 billion in annual revenue by the end of 2025—making the valuation nearly 100 times its yearly income.

CEO Sam Altman has been clear about why this matters. The company plans to spend $1.4 trillion on AI infrastructure over the next five years. An IPO provides the most realistic path to raise that kind of money.

The Reality Behind the Hype

The numbers tell a complicated story. While OpenAI’s revenue is growing rapidly, so are its losses. In the first half of 2025 alone, the company lost $13.5 billion on revenue of $4.3 billion. Analysts expect losses to reach $27 billion for the full year, with some estimates suggesting the company could burn through $115 billion by 2029.

These massive losses raise serious questions about whether a $1 trillion valuation makes sense. Some analysts warn this could signal a tech bubble similar to the dot-com crash of the early 2000s. If investor enthusiasm fades, the IPO could trigger a broader market correction.

China’s Surprise Challenge

The AI competition isn’t just between American companies anymore. Chinese startup DeepSeek shocked the tech world by claiming it trained AI models for far less than American rivals. While DeepSeek reported $5.3 million for its final training run, experts estimate the company’s total hardware spending exceeds $500 million. Even so, this represents a fraction of OpenAI’s $5.7 billion research budget in the first half of 2025 alone.

The differences became stark during an autonomous crypto trading competition in October 2025. DeepSeek was the only AI model to generate a positive return—about 9%—while OpenAI’s ChatGPT-5 suffered a 66% loss and finished last. The competition, hosted by AI research firm Nof1, gave each model $10,000 to trade cryptocurrencies on the Hyperliquid exchange. This caught many experts off guard, though analysts note the models could perform differently with better prompts and training data.

President Donald Trump called DeepSeek’s emergence a “wake-up call” for American tech companies. The concern isn’t just about market share—it’s about national security and which country will control the most powerful technology of the 21st century.

The Crypto Connection

The AI boom has direct implications for cryptocurrency markets. AI agents are already being tested for automated crypto trading, though early results show the technology still needs improvement. Beyond trading, the intersection of AI and blockchain has created what industry experts estimate could be a $55 billion market by early 2025.

Cryptocurrency infrastructure also offers advantages for AI systems. Traditional banking is too slow for AI agents that need to make instant decisions. Crypto transactions happen 24/7 without delays, making them ideal for AI-powered applications. As John D’Agostino, head of institutional strategy at Coinbase, explained, using traditional financial systems with AI agents is like “trying to stream a movie on a dial-up modem.”

Major crypto companies are taking notice. The AI-crypto market could add another $20 trillion to the global economy by 2030, according to researchers. Projects combining AI and blockchain are attracting significant developer and investor interest, creating opportunities for both established players and newcomers.

Energy and Infrastructure Concerns

OpenAI’s expansion plans face a major hurdle: energy consumption. AI data centers require enormous amounts of electricity—as much power as entire cities. This has already started raising residential electricity rates in some areas, leading to political backlash.

In states like Pennsylvania and Maryland, the competition between AI companies and regular consumers for electricity has become a campaign issue. If AI companies can’t secure reliable, affordable power, their growth plans could stall regardless of how much money they raise.

Racing Toward an Uncertain Future

OpenAI’s trillion-dollar IPO plan represents a turning point for artificial intelligence. The company is betting that massive investment in infrastructure and research will lead to breakthroughs worth far more than today’s astronomical valuation. Critics argue the math doesn’t add up and warn of a bubble that could burst spectacularly.

Meanwhile, Chinese competitors are proving that innovation doesn’t always require unlimited budgets. The real question isn’t whether AI will transform the world—most experts agree it will—but which approach will win: America’s capital-intensive model or China’s lean, efficient alternative. The answer will shape not just the tech industry, but the global balance of power for decades to come.