Welcome back to Neural Notes, a weekly column where I look at how AI is influencing Australia. In this edition: why founders who are relying heavily on ChatGPT and OpenAI for their business should really pay attention to the IPO news. In a deeply unsurprising move, OpenAI has reportedly filed confidential paperwork to go public. The ChatGPT maker is expected to command a valuation of more than US$850 billion (AU$1.2 trillion), potentially making it one of the largest technology listings in history. Related Article Block Placeholder Article ID: 338197 “Dangerous product”: Florida sues ChatGPT-maker OpenAI and CEO Sam Altman David Fischer The filing comes just months after OpenAI raised US$122 billion (AU$174.1 billion) in fresh capital and only a week after rival Anthropic reportedly began its own IPO process. Together, these moves suggest the AI industry’s biggest players are preparing for a future where they’ll be under the spotlight of public market scrutiny. Smarter business news. Straight to your inbox. For startup founders, small businesses and leaders. Build sharper instincts and better strategy by learning from Australia’s smartest business minds. Sign up for free. * indicates required Email Address * By continuing, you agree to our Terms & Conditions and Privacy Policy. This arguably matters more than a regular blockbuster IPO because a huge chunk of the world’s AI ecosystem now depends on a handful of companies that are still figuring out how to turn eye-watering infrastructure costs into sustainable profits. If you’re using OpenAI directly, or through the growing number of tools that quietly rely on its models underneath, you’ve effectively signed a lease with a landlord you haven’t properly vetted. Until a prospectus lands, most businesses have little visibility into the finances, risks, or long-term economics of the company that they’re becoming increasingly reliant on. Reports have suggested OpenAI could burn through more than US$10 billion (AU$14.28 billion) this year on infrastructure while remaining firmly in the red. That’s not necessarily a problem for a private company backed by some of the world’s biggest investors.  It becomes a much more complicated position when Wall Street enters the picture. What is a confidential filing and why does it matter? A confidential filing is essentially the IPO warm-up to the real thing. Draft paperwork goes to regulators, bankers start shaping the valuation story, and lawyers spend months expanding the risk section. The public-facing version comes later. But the important thing for founders and SMEs right now is that incentives start changing well before listing day. Related Article Block Placeholder Article ID: 333681 OpenAI closes Sora app in surprise reversal on generative AI video David Adams If you’re preparing for public markets while still spending heavily on growth and infrastructure, you become much more focused on predictable revenue, enterprise contracts, and clearer paths to profitability. Investors don’t buy potential forever. Eventually, they want actual margins. When the public filing eventually arrives, OpenAI will have to start addressing the numbers far more strongly.  With the prospectus will come a detailed explanation of risks, dependencies, and financial realities. We’ll get a clearer picture of where revenue comes from, how much infrastructure costs, how reliant OpenAI remains on major partners, and what management sees as the biggest threats to the business. Why startups and small businesses need to be paying attention to the OpenAI IPO now And anyone reliant on OpenAI to run their business should consider this mission-critical reading. The issue is that many businesses have become accustomed to treating AI as an endlessly improving utility. A great deal of leeway has been given to a technology that has consistently had issues for years. It’s also being sold at a relatively low price compared to the compute power needed to run the LLMs. While this makes sense in the battle for market share, it won’t last forever. Especially once it goes public. In the meantime, the companies providing those services are still working out what sustainable economics looks like. As I’ve argued in the past, pure subscription models won’t cut it – which is why we have seen OpenAI push so hard into ad offerings over the past six months. Many businesses are also far more dependent on OpenAI than they realise. OpenAI is actively courting Australian startups and SMEs through credits, partnerships and local initiatives. Meanwhile, banks, telcos, and software vendors continue embedding their models into everyday tools. If pricing changes, usage limits tighten, or product priorities shift, most customers won’t get a vote, but they will have to live with the potentially pricey consequences. Related Article Block Placeholder Article ID: 332633 Neural Notes: Australian AI startups may face the same defence dilemma as OpenAI, Anthropic Tegan Jones We’ve seen this before with cloud computing. Companies built on a single provider eventually discovered the risks (and bill-shock) of having such critical dependency on a single provider. This isn’t to say you need to stop using OpenAI, or whoever your AI provider is. But despite what some of the LinkedIn evangelisers say, it’s not your magical co-founder, a limitless intern or cheap extra labour. At least not forever. AI needs to be treated like any other kind of infrastructure.  Where does AI actually appear in your business? Which workflows would break if costs increased and you had to reconsider them? Which products depend on a specific model? Which customer promises rely on capabilities you don’t directly control? While you don’t need to build sophisticated multi-model architecture from day one, you should try to avoid being locked in so you have options if circumstances change. A company spending billions while also preparing for an IPO will almost certainly keep experimenting with pricing, packaging, and premium features as it clutches for long-term margins. If your own business model only works if today’s AI pricing remains frozen… you might want to rethink your position. And once that prospectus finally drops, treat it as critical reading. Stay in the know Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on LinkedIn.