OpenAI IPO Update: Confidential Filing, and CFO Friar Is Still in Place

OpenAI's CFO Sarah Friar has internally pushed back against CEO Sam Altman's plan to take the company public in Q4 2026, warning that the organization is "not ready" for an IPO, according to a report by The Information.

The disagreement goes beyond timing. Friar has reportedly been excluded from some financial meetings, and her reporting line was quietly shifted from Altman to Fidji Simo, head of OpenAI's applications business. With $14 billion in projected annual losses, the Sora shutdown, a wave of executive departures, and Elon Musk's trial looming, what exactly is happening inside OpenAI?

Why the CFO Said "Not Ready"

According to multiple reports, Friar's objections center on three key concerns.

First, organizational readiness. The internal controls and compliance infrastructure required for a public company may not be in place by late 2026.

Second, massive infrastructure spending with uncertain returns. OpenAI has signed cloud server contracts totaling over $600 billion across the next five years with Oracle, Microsoft, AWS, CoreWeave, and others. Friar has questioned whether slowing revenue growth can justify these commitments.

Third, the long road to profitability. According to financial documents obtained by Fortune, OpenAI is not expected to reach profitability until 2029 or 2030, burning through more than $200 billion in cash before getting there. Going public while unprofitable isn't unusual, but doing so at this scale is unprecedented.

Why Altman Is Pushing Ahead

Altman has reasons to move fast. According to the Wall Street Journal, he is acutely aware that Anthropic is also exploring a late-2026 listing, and he wants OpenAI to be the first major generative AI startup to go public.

OpenAI has already hired a chief accounting officer and an investor relations lead, and has begun informal discussions with Wall Street banks. The target valuation is roughly $1 trillion.

That said, Altman has expressed ambivalence. In one interview, he said being a private company is "wonderful," and that going public would be partly exciting and partly "really annoying."

$14 Billion in Losses: OpenAI's Financial Picture

OpenAI's revenue has grown rapidly, from roughly $3.7 billion in 2024 to an annualized $25 billion as of February 2026, driven by ChatGPT subscriptions and API usage.

But costs are growing even faster. The company's 2026 losses are projected at about $14 billion, nearly triple the approximately $5 billion lost in 2024. OpenAI is on track to lose more money than it earns.

The core cost driver is AI inference infrastructure. OpenAI has signed massive server rental contracts with Oracle (~$300B), Microsoft (~$250B), AWS (~$138B), and others, totaling over $665 billion.

What the CFO's Sidelining Means

The most striking revelation is that Friar has been removed from Altman's direct reports.

Friar joined OpenAI as CFO in June 2024. She previously served as CEO of Nextdoor and before that as CFO of Square (now Block), where she led the company through its IPO.

According to PYMNTS.com, her reporting line was quietly changed from Altman to Fidji Simo, and Altman has excluded her from certain investor meetings.

For a company preparing to go public, having the CFO cut off from the CEO's direct line is highly unusual. The CFO typically leads IPO preparation at the operational level, and investors will want assurances that this relationship is functional.

Publicly, both Friar and Altman have stated they remain "aligned on the company's compute strategy."

Sora, Executive Exits, and the Musk Trial: Three Crises at Once

The IPO rift has emerged against a backdrop of multiple simultaneous crises at OpenAI.

Sora Shutdown (announced March 24)

OpenAI's video generation tool Sora was burning roughly $1 million per day while generating only $2.1 million in total lifetime revenue. Users peaked at around 1 million before collapsing below 500,000. The app closes April 26 and the API on September 24. Disney's planned $1 billion investment was scrapped.

Executive Departures (announced April 3)

In a single announcement, COO Brad Lightcap moved to "special projects," CEO of Applications Fidji Simo took medical leave for a POTS relapse, and CMO Kate Rouch stepped down to focus on cancer treatment. Three senior executives effectively left their posts within one week.

Musk Trial (starting April 27)

OpenAI co-founder Elon Musk's lawsuit alleging that OpenAI betrayed its nonprofit mission heads to a jury trial on April 27 in Oakland. Musk is seeking between $79 billion and $134 billion in damages, and the trial is expected to last four weeks. An active lawsuit of this magnitude running parallel to IPO preparations is an unprecedented risk for investors.

Update, August 17, 2026: What Has Happened Since

Four and a half months have passed since this article was published on April 6, 2026. The IPO filing, Friar's position, the executive bench, the Musk case, and the revenue mix have all shifted from where they stood then. Here is where each one now sits.

How Far the IPO Preparation Has Gone

On June 8, 2026, OpenAI filed confidentially with the SEC for an IPO. A confidential filing lets a company work through the regulator's review of its S-1 before the document becomes public. At this stage the size of the raise, the terms, the timing, the exchange, and the valuation all stay undisclosed. CNBC reported, citing people familiar with the matter, that a listing could come "as early as the fourth quarter" — a conditional outlook, not a fixed date.

If anything, the timing has drifted later. In late June, Reuters reported that OpenAI was weighing a 2027 listing as an option, with SpaceX's weak debut cited in the same reporting as a factor. Altman is described as holding to the position that any valuation under $1 trillion is a "nonstarter."

Asked about the IPO at the August 14 investor briefing, Friar said she could not discuss it because of the confidential filing. As of August 17, 2026, no public S-1 could be found on EDGAR, the SEC's disclosure system, and no lead underwriters or listing date have been announced. The "Q4 2026 IPO plan" described in the original version was a target reported by the WSJ, not confirmed information.

Friar Has Not Left

This is the premise of the article that changed most. Sarah Friar is still OpenAI's CFO as of August 17, 2026. She led the investor briefing herself on Friday, August 14. She has not been pushed out of IPO execution or investor-facing work.

The reporting-line change and the exclusion from meetings described in the original version came from The Information. Since then, no report of a resolution, no announcement of a reconciliation, and no official OpenAI denial of that reporting could be verified. What is known is simply that Friar is still in the same job four and a half months later.

Fidji Simo, the executive Friar was said to report to, stepped back from her full-time role in July. Friar took over part of that workload, which means the reporting structure described at the time no longer exists in any form.

Who Left Instead

While Friar stayed, the executives around her left one after another, with the departures concentrated in July and August.

Fidji Simo had been described as the executive closest to Altman in seniority. On July 9 she said she would step down as CEO of AGI deployment and move to a part-time advisory role, citing a worsening of POTS, a disorder of the autonomic nervous system in which standing up drives the heart rate abnormally high and brings on dizziness and severe fatigue. Friar picked up part of her portfolio.

On August 11, COO Brad Lightcap left the company after eight years, reportedly to start a new venture. In the original version of this article he had just been reassigned to "special projects"; roughly four months later he was gone entirely.

On August 13, CRO Denise Dresser stepped down after only eight months in the role, which oversees the entire revenue-generating organization. Dali Rajic, previously of the cloud security company Wiz, took over.

The same day, Fortune reported that nearly all of the senior women hired two years earlier had left, with Friar the one who remains. Safety and ethics saw departures too: ethics lead Chloé Bakalar and Johannes Heidecke of Safety Systems were reported to have left in July.

On August 14, CNBC reported that investors read this run of exits as a serious red flag ahead of an IPO. Whether a management team holds together is itself part of what buyers assess before a listing.

The Musk Case Is Over

The jury trial described in the original version as "starting April 27, expected to run four weeks" has been decided. On May 18, 2026, a jury in the U.S. District Court for the Northern District of California, sitting in Oakland, rejected Musk's claims in full after deliberating for less than two hours.

The basis for that outcome was not the substance of the dispute. The claims failed on the statute of limitations, the three-year window within which the suit had to be filed. The jury never ruled on whether OpenAI departed from its nonprofit mission. Had Musk won, the case could have led to disgorgement — a remedy ordering a party to give up gains it obtained improperly — of up to $150 billion.

Musk called the result a "calendar technicality" on X shortly after the verdict and said he would appeal to the Ninth Circuit. Separately, a trade secrets suit brought by xAI remains pending, and OpenAI has moved to dismiss it. Reporting suggests substantive appellate proceedings would fall in late 2026 or 2027, though no confirmed schedule could be verified. The legal risk to the IPO has shrunk in scale rather than disappeared.

Revenue Is Growing

The figures Friar gave at the August 14 investor briefing have moved well past where this article left them. Annualized revenue reached $40 billion, up roughly 60 percent in six months from the $25 billion reported in February 2026.

The change in mix may matter more than the total. Enterprise revenue passed consumer revenue for the first time, roughly two quarters earlier than the company had projected. Friar put it this way: "We entered the year at 60-40, but enterprise has accelerated much faster than expected and those lines have now crossed." Enterprise revenue tends to churn less and price more predictably, which is the kind of profile buyers prefer to see ahead of a listing.

The losses are another matter, and the reported figures still do not agree with one another. The "roughly $14 billion in 2026" in the original version was one projection among several. No official loss figure confirmed by OpenAI itself could be verified as of August 17, 2026. The numbers that have been reported line up like this.

Operating loss and net loss are not the same measure. Operating loss covers the core business; net loss adds items outside it, such as stock compensation charges and investment gains or losses, and tends to come out far larger. Any headline putting a single number on "OpenAI's losses" is not comparable to another unless the year and the measure match. That ambiguity sits alongside the split investors are already showing: strong revenue growth on one side, unease about the churn in the executive ranks on the other.

After Sora, and What Comes Next

Sora's web and app access ended on April 26, 2026, as announced. The Sora API is scheduled to shut down on September 24, 2026, with refunds having started in June. That date was months away when this article was published; it is now a little over a month out.

The reasons given in reporting were the economics — roughly $1 million a day in cost against about $2.1 million in cumulative revenue — along with copyright and deepfake problems and a pre-IPO focus on profitability.

No successor video product has been announced. Altman has said he is moving away from video toward agents, meaning AI that works through a task by deciding the steps on a user's behalf, and toward a next-generation model called Spud. Spud has been reported to have finished pretraining, the stage where a model's base is built from large volumes of data, but no formal release could be verified as of August 17, 2026.

Timeline of What Changed

"The Canary in the AI Bubble's Coal Mine"

On social media, some are reading OpenAI's situation as a risk signal for the broader AI industry.

Michael Burry, the investor made famous by "The Big Short," posted on X that OpenAI's financial situation "is not surprising and will not end with OpenAI," warning that the wave of AI infrastructure spending has the hallmarks of a mania.

Meanwhile, OpenAI's pre-IPO filing reportedly listed Microsoft as a "business risk," despite Microsoft being the company's largest investor and primary compute provider. As Windows Central noted, tensions between the two companies are already visible.

Will the IPO Actually Happen?

Based on the current information, a 2026 IPO faces significant obstacles.

With the CFO publicly reported as opposing the timeline, investment banks will inevitably adopt a more cautious stance. Friar herself reportedly favors a 2027 listing, potentially filing the S-1 in late 2026.

The Musk trial begins April 27 and is expected to run four weeks. An unfavorable verdict could result in a damages order in the tens of billions, potentially derailing the entire IPO. The judge has been skeptical of Musk's damages calculations but allowed the case to proceed on the grounds that "there is plenty of evidence."

Fortune called the potential IPO "a test of investor tolerance for the AI boom's cash bonfire." Revenue growth is impressive, but costs are growing even faster, recalling the dynamics of the late-1990s dot-com era.

OpenAI's story has entered a new phase: the collision between ambition and reality. Whether Altman's urgency or Friar's caution proves correct is a question the market will answer in the months ahead.

Sources

• ▸ The Information - OpenAI CEO and CFO Diverge on IPO Timing (April 6, 2026)
• ▸ Reuters / TradingView - OpenAI CFO Raises Concerns Over 2026 IPO Plans (April 6, 2026)
• ▸ Fortune - OpenAI IPO Would Test Investor Tolerance for Cash Burn (January 30, 2026)
• ▸ Fortune - OpenAI Cash Burn Rate and Annual Losses (November 12, 2025)
• ▸ CNBC - OpenAI Data Center Pivot Underscores IPO Concerns (March 22, 2026)
• ▸ TechCrunch - Why OpenAI Really Shut Down Sora (March 29, 2026)
• ▸ TechCrunch - OpenAI Executive Shuffle (April 3, 2026)
• ▸ TechCrunch - Musk Wants Up to $134B in OpenAI Lawsuit (January 17, 2026)
• ▸ Yahoo Finance - OpenAI's Own Forecast Predicts $14B in Losses (2026)
• ▸ Variety - Why OpenAI Shut Down Sora (2026)
• ▸ NPR - Jury Dismisses Musk's Claims Against Altman and OpenAI (May 18, 2026)
• ▸ CNBC - Musk v. Altman Trial Verdict and Musk's Appeal (May 18, 2026)
• ▸ CNBC - OpenAI Confidentially Files for IPO (June 8, 2026)
• ▸ Forbes - OpenAI Considers Delaying IPO to 2027 After SpaceX's Rocky Debut (June 25, 2026)
• ▸ CNBC - Fidji Simo Steps Down and Transitions to Part-Time Advisor (July 9, 2026)
• ▸ CNBC - Longtime OpenAI Executive Brad Lightcap Leaves (August 11, 2026)
• ▸ CNBC - OpenAI CRO Denise Dresser Exits After Eight Months (August 13, 2026)
• ▸ Fortune - OpenAI Hired a Wave of Powerful Female Executives. Two Years Later, Almost All Are Gone (August 13, 2026)
• ▸ CNBC - OpenAI CFO Friar Tells Investors Enterprise Is Bigger Than Consumer (August 14, 2026)
• ▸ CNBC - Investors Call the Talent Exodus a Red Flag Ahead of the IPO (August 14, 2026)
• ▸ Crowdfund Insider - OpenAI Sees Wave of Departures Among Key Safety and Ethics Execs (August 2026)
• ▸ OpenAI Help Center - What to Know About the Sora Discontinuation