OpenAI hired an initial public offering (IPO) veteran as its Chief Financial Officer (CFO) as rumors swirled about the company going public.
Sarah Friar joins the generative artificial intelligence (AI) software company after leaving social media company NextDoor Holdings (NASDAQ:KIND), where she was CEO.
Friar also has experience at Block (NASDAQ:SQ), Goldman Sachs (NYSE:GS) and McKinsey. OpenAI has been without a CFO since Brad Lightcap moved up to Chief Operating Officer in 2022.
Officially, OpenAI dismissed talk of a forthcoming IPO.
Does OpenAI Need an IPO?
Since it launched ChatGPT in November 2022, interest in OpenAI has soared. Microsoft (NASDAQ:MSFT) has invested billions in the company. Yesterday, Apple (NASDAQ:AAPL) announced an alliance with it during its Worldwide Developer Conference.
However, the company’s higher profile brings new challenges. Tesla (NASDAQ:TSLA) CEO Elon Musk threatened to ban Apple devices from his companies over the OpenAI deal. Publishers continue to threaten suits against the company over its use of 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 working at Meta Platforms (NASDAQ:META).
If OpenAI moves toward an IPO, Friar will be an important addition. She is a former vice president at Salesforce (NASDAQ:CRM) and sits on the board of Walmart (NYSE:WMT). In the AI space, she serves as co-chair of the Stanford Digital Economy Lab.
Despite the company’s denials of an imminent IPO, speculation about one is rising as it burns through investor cash. It costs $700,000 each day to run ChatGPT, and the company is not yet profitable. An Indian analytics trade magazine 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 its finances, the IPO will be a major event on Wall Street.
As of this writing, Dana Blankenhorn had a LONG position in MSFT, AAPL, and CRM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
