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OpenAI IPO? Announcement of new CFO stirs intrigue regarding IPO

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OpenAI an IPO (initial public offering) veteran as Chief Financial Officer (CFO) when rumors of the company going public emerged.

Sarah Friar joins generative artificial intelligence (AI) software company after leaving the social media company NextDoor Holdings (NASDAQ:ART), where she was CEO.

Friar also has experience in block (NASDAQ:SQ), Goldman Sachs (NYSE:GS) And McKinseyOpenAI has been without a CFO since Brad Lightcap was promoted to Chief Operating Officer in 2022.

OpenAI officially denied rumors of an impending IPO.

Does OpenAI need an IPO?

Since the launch of ChatGPT in November 2022, interest in OpenAI has skyrocketed. Microsoft (NASDAQ:MSFT) has invested billions in the company. Yesterday Apple (NASDAQ:AAPL) announced an alliance with the company during its Worldwide Developer Conference.

However, the company’s increased awareness also brings with it new challenges. Tesla (NASDAQ:TSL) CEO Elon Musk threatened to ban Apple devices from his companies because of the OpenAI deal. Publishers continue to threaten the company with lawsuits for using their content as training data.

In addition to Friar, OpenAI also hired Kevin Weil as Chief Product Officer. Weil co-founded a now-defunct cryptocurrency called Libra (and then Diem) when he was at Meta-platforms (NASDAQ:META).

As OpenAI moves toward an IPO, Friar will be an important addition. She is a former vice president at Foreclosure (NASDAQ:CRM) and sits on the board of Walmart (NYSE:WMT). In the AI ​​field, she is co-chair of the Stanford Digital Economy Lab.

Although the company denies an impending IPO, speculation is growing about it as it burns investors’ money. ChatGPT costs $700,000 a day to run and the company is not yet profitable. An Indian analytics journal recently said that at its current cash burn rate, OpenAI could go bankrupt by the end of 2024.

What happens next?

Whenever OpenAI decides to go ahead and regardless of the company’s financial situation, the IPO will be a major event on Wall Street.

At the time of writing, Dana Blankenhorn had a LONG position in MSFT, AAPL and CRM. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publishing policies.

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