OpenAI's problem is becoming our problem

So far in 2026, OpenAI has not had a great year. Originally, Sam Altman described OpenAI as a nonprofit organization working for the betterment of humanity. Now, the company has shifted its focus to shareholders, specifically gearing up for one of the largest initial public offerings in history. But as a direct result of this, the company has faced many problems, such as legal challenges over the fair use of intellectual property, legal challenges over its governance, legal challenges over the safe use of AI and its tools, large groups of top AI developers leaving for competitors, and now outstanding reputational damage. All of this deepened the wound they recently received as a result of Altman's decision to endorse the USA's military plans regarding mass surveillance and AI incorporation.

In response to this decision over the last few weeks, some of the most outspoken supporters of AI have come out against it. And lastly, all of this is stacked on OpenAI's most outstanding problem, that they are losing unfathomable amounts of money every month on top of trillions of dollars in future spending commitments, with zero plan on how the company will raise this money. Maybe we could see past these problems if they were still the outstanding leader in this world-changing technology, but in the last 3 years, multiple other models have emerged from better-funded companies that have either matched or exceeded OpenAI's capabilities.

Last week, Amazon, Nvidia, and SoftBank announced a record investment of $110 billion in additional funding, ensuring OpenAI will continue running for at least a few more months. But this lifeline has led to another outlying issue being brought up. OpenAI and other private companies like Anthropic and SpaceX have now become so absurdly powerful in private markets that if they all go public this year, they could legitimately crash the entire stock market. In any scenario, an IPO brings a large amount of public scrutiny to the company as its financial operations are thoroughly picked apart. But that is not the main problem OpenAI will face; going public will ensure much more regulation of the stories that Sam Altman can report, with Altman in particular gaining a bit of a reputation for making big promises about the financial potential of his businesses, including almost all the companies he ran previously to OpenAI. His messaging will have to be picked much more carefully when approaching the IPO. While in recent times the SCC has been known to be quite lenient, we have seen a company be punished just recently for this exact situation when the government addressed Anthropic. OpenAI has made promises they financially can not afford to keep for technology that is no longer niche, being offered to users who are consistently transitioning away from the company towards competitors. As these problems have increasingly caught up with the company, we have seen choices that seem desperate to force the numbers in the right direction, such as integrated advertising and a large military contract. While these decisions may have introduced new revenue streams, they have made projections for the future even worse.

But getting back to how the company may crash the market, OpenAI could realistically be the largest IPO in history, projected as one of the largest companies in the world, slotting in between JP Morgan and Exxon. Not all shares would be immediately open for purchase on the first day, but even assuming a conservative 5% of the company's shares are for purchase, that would be about $40 billion all purchased within hours. When Facebook went public in 2012, it put up 15% ofitss stock to raise $22 billion. A similar offering from OpenAI would be five times the volume.

Collectively, these three companies I mentioned could raise more money this year than the last decade of IPOs combined, and this cash must come from somewhere. And the main fear is that the market won't be able to supply that amount of capital in such a short period of time. The amount of money these companies want to raise would be more than the net buying activity that the US market has seen in years, and all of this ignores every other company people traditionally invest in. If OpenAI can't raise this cash, it will raise questions over its future spending commitments. The sheer size of these companies is raising another key concern. Large indices that track the stock market will have to readjust to include them; the largest companies of today started as relatively small-cap stocks and grew to their size, giving indices time to weigh them more heavily. If these 3 IPOS all go ahead at their proposed values, they would instantly jump close to the top of these indices, forcing these large asset managers to sell down many other companies to truly represent the market. While no one knows certainly how any of these situations will turnout most of it points to a majority of this risk being dumped on regular investors or just the public in general. If we do see these companies fail, they could bring down the entire market.