The long-standing competition between OpenAI and Anthropic has turned into a race that determines not only the release speed of new AI products but also the companies' IPO timelines.
OpenAI learned in late 2022 that Anthropic was working on an AI-powered chatbot, prompting CEO Sam Altman to instruct employees to accelerate a rival product. Shortly after this move, ChatGPT was launched and sparked a major transformation in the global AI field.
First move in IPO race came from Anthropic
The competition between the two companies has now shifted to IPO plans. The companies believe that the first to go public will shape investor perception and strengthen its position as the leading AI company.
Until May, many advisors expected OpenAI to make the first move for an IPO, and the company told some investors that plans were being made starting from September. However, Anthropic announced on June 1 that it had confidentially filed with US regulators, pulling the race forward.
The rivalry between OpenAI and Anthropic is felt not only among company executives but also on Wall Street. The two major competitors, seeking capital at the same time, had to work with the same banks, and some advisors set up walls between teams to prevent information leaks.
Reuters previously reported that OpenAI was considering going public at a valuation of around $1 trillion. The report noted that an IPO of this size could set a precedent for how investors value companies.
Divergence also seen in financial narrative
The competition between the two companies also extends to how revenues are presented. OpenAI told investors and employees that the accounting method preferred by Anthropic inflated revenues by billions of dollars.
In April, OpenAI's revenue director Denise Dresser told employees in an internal memo that they viewed Anthropic's financial data as inflated. OpenAI argues that its own model reports net revenue after deducting payments to business partners.
Anthropic, however, told Reuters that it follows established accounting practices and recognizes gross revenue because it is the 'principal' in the transaction. The company stated that it views cloud partners as distribution channels.
Dresser's internal communications aimed to reassure OpenAI employees who were demoralized by Anthropic's rapid growth. One analyst said that Anthropic's IPO would give it the opportunity to set the agenda for financial reporting of advanced AI models.
Disagreement also arose between Altman and company management
The competition also created tension within OpenAI at times. Sam Altman argued with chief financial officer Sarah Friar over whether the company could meet the obligations required by a short-term IPO timeline.
Altman reportedly said that they needed to complete the process or find different bankers and lawyers who could do it. Later, Friar told advisors that management was aligned on the timing.
After Anthropic's filing, Altman told CNBC in an interview that he did not want to rush OpenAI's exit.
The rivalry's roots go back to safety priorities
The rivalry between the two companies dates back to late 2020. Dario Amodei, while serving as vice president of research at OpenAI, left with some others to found Anthropic, promising a safety-first approach.
This departure was seen by many OpenAI employees as a rejection of Altman's approach. Anthropic trained its first Claude version in early 2022 but did not release it publicly to complete safety research.
Similar work was underway at OpenAI, with some teams working on a 'super assistant' powered by the advanced models of the time. Another internal team was developing a chat interface, and even announcing this tool alongside GPT-4 in March 2023 was considered an option.
In mid-November, as rumors about Anthropic's project intensified, Altman instructed employees to prepare the chatbot as soon as possible. Thus, the race between the two companies became a driving force shaping not only product launches but also the future of AI.
