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New structure makes OpenAI 'IPO-able'

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Says 10 gigawatts of data capacity could cost $500 bln

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Points to rapidly growing search market as priority

(Adds quote on possible $500 billion data centre investment,

search as a priority in paragraphs 11-14)

By Conor Humphries

DUBLIN, May 28 (Reuters) - OpenAI's restructuring plans

position it for a potential future IPO, but any such decision

would depend on the mood in public markets as well as the

readiness of the company, Chief Financial Officer Sarah Friar

said on Wednesday.

OpenAI, in which Microsoft ( MSFT ) has invested more than

$13 billion, outlined plans in December to convert its

for-profit arm into a public benefit corporation (PBC), a

structure designed to balance shareholder returns with social

goals, unlike nonprofits, which are solely focused on public

good.

The ChatGPT-maker dialed back the plan earlier this month,

giving the nonprofit parent control of the PBC through a big

shareholding, while still allowing the for-profit arm to raise

more capital to keep pace in the AI race.

"A PBC gets us to an IPO-able event ... if and when we want

to," Friar told the Dublin Tech Summit.

"Nobody tweet in this room that Sarah Friar just said

anything about OpenAI ultimately going public," she added. "I

did not. I said it could happen."

Asked what would influence a decision, Friar said that as

with any company planning to launch on the stock market, the

company and markets would have to be ready.

"You can show up at the altar all ready to go, and if the

market's not ready for you, yeah, you're just out of luck," she

said.

"Which is why you have to build a company that can be

sustainable and safe regardless of where the public markets are,

how open that window is."

To be a public company, "you definitely need some sense of

predictability," Friar added.

"The market will put up with a certain degree of

unpredictability. Particularly when growth is high ... but the

market doesn't really love it."

To give a sense of the "massive" scale of capital that

OpenAI might require, Friar said that while a 1 gigawatt data

centre footprint costs about $50 billion, the company's

"appetite and ambition" over the next couple of years was to get

closer to about 10 gigawatts.

Friar singled out the rapidly growing AI search market as a

priority and said that while the company would seek

efficiencies, its focus was on finding the next breakthrough

product.

"The search market is becoming a big market," Friar said.

"In that world, I don't really want people spending an

inordinate amount of time trying to save an extra 1% when I

would rather they went out and kind of built the next

state-of-the-art product."

(Writing by Conor Humphries

Editing by Mark Potter and Elaine Hardcastle)