Scott Galloway Sounds Alarm On OpenAI IPO, Warns Company Could Scrap Public Listing Amid 'Thin' Competitive Edge

Scott Galloway, a renowned marketing professor at NYU Stern and a tech analyst, has raised concerns about the future of OpenAI IPO amid the company’s diminishing competitive edge and other factors.

Galloway Questions OpenAI IPO Prospects

In his podcast, The Prof G on Monday, Galloway suggested that OpenAI’s IPO might not be a sure thing, and there is a possibility of the company withdrawing its IPO plans entirely. “I think Open AI could get pulled,” he stated

He pointed out that OpenAI’s competitive advantage is fragile, especially when compared to other deep-tech giants like SpaceX. Additionally, Galloway noted that rival Anthropic is outperforming OpenAI in the enterprise sector by positioning itself as a secure, human-centric “partner.

“sustainable advantage is really really thin,” he stated.

Galloway and the co-host Ed Elson also discussed a significant “vibe shift” affecting OpenAI. He argued that the company’s brand perception, which was previously positive, has now turned negative.

He attributed this shift to the company’s recent brand management, particularly criticizing the “proximity” between CEO Sam Altman and President Donald Trump. The professor also raised skepticism about OpenAI’s valuation. He termed these as factors causing unease among investors and the public.

OpenAI Eyes $100 Billion Funds Amid Backlash

Galloway’s warning comes amid a series of challenges for OpenAI. He had previously warned of a potential collapse of the Altman-led start-up, citing the firm’s lack of a sustainable financing strategy and the possibility of a taxpayer bailout. This latest warning about the IPO adds to the growing concerns about OpenAI’s future.

Despite these warnings, OpenAI has been making headlines for its ambitious plans. The company’s chief financial officer suggested that the government could serve as a financial “backstop” if the company struggled to pay its bills, a statement that drew criticism from Sen. Elizabeth Warren (D-Mass.). Warren criticized the call for taxpayers to back OpenAI, while the company pays employees an average of $1.5 million annually in stock compensation.

OpenAI plans to raise up to $100 billion at an $830 billion valuation to fund its expansion and data center needs. The company is reportedly in discussions to raise funding of nearly $40 billion from its major suppliers, NVIDIA Corp. (NASDAQ:NVDA), Amazon.com Inc. (NASDAQ:AMZN), and Microsoft Corp. (NASDAQ:MSFT).

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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