OpenAI Is Making Plans to File to Go Public Very Soon

0:00The thing about AI for business, it may not automatically fit the way your business works.

0:05Berber Jin:At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM.

0:33OpenAI plans to file for an IPO, maybe as soon as this week. Plus, the Trump administration charges Cuba's former president, Raul Castro, with murder, escalating its campaign against the country's communist regime.

0:46Berber Jin:For the first time in nearly 70 years, senior leadership of the Cuban regime has been charged in this country, in the United States of America, for acts of violence resulting in the deaths of American citizens. And it's about to get a lot harder to earn an A at Harvard. It's Wednesday, May 20th. I'm Alex Oselev for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:19We're exclusively reporting that OpenAI, the company behind ChatGPT, is preparing to file for an IPO very soon, possibly as soon as this Friday. The journal has learned that the company's goal is to be ready to go public as early as September. Berber Jin covers startups and venture capital and joins me now. Berber, a September IPO. Was this the timing that OpenAI had been expecting? Like, what helped determine this timing?

1:44Berber Jin:The timing came as a really big surprise to everyone because we knew from our reporting that OpenAI was targeting a listing by the end of this year. But to file a confidential prospectus as soon as this Friday really suggests that they are looking to go basically as soon as possible. And it's hard to know exactly why they're rushing, but what we do know, more broadly speaking, is that they're competing against Anthropic and, to a certain extent, SpaceX, to capture the mindshare of big pockets of money in the public markets that are looking to invest in AI companies. And each of these different companies see the advantage of being the first or the second to go out and kind of set the narrative around their business ahead of their rivals.

2:35Berber Jin:There's a lot of pent-up demand amongst retail investors and institutional investors like hedge funds, pension funds, etc. to invest in these AI companies. What other kinds of challenges does the business face? There's been a lot of uncertainty recently about whether OpenAI will be able to pay for these giant data center spending commitments they've signed up for. Roughly$600 billion of spending that they're on the hook to pay through 2030. And we've reported that OpenAI has recently had some stumbles. They've missed a few internal revenue targets. They've come under very intense competition from Anthropic and Google.

3:12Berber Jin:The really big question mark is whether they can get the business in a good enough shape and accelerate their revenue growth in order to tell a story to investors, to Wall Street, where people feel like their finances are in good condition and that they will be able to pay for these giant computing contracts that they signed up for. That was WSJ reporter Berber Jinn. Thanks, Berber. Thank you. And breaking news this afternoon, the IPO paperwork for SpaceX was just made public, unveiling key financial details. Read more on WSJ.com. Separately in tech, Meta has begun a big round of layoffs. The cuts of roughly 8 ,000 jobs, or 10 % of the company's staff, are meant to offset the costs of Meta's AI buildout.

3:56It's also reassigning thousands of other workers to AI-focused jobs.

4:03The massive gains in chip manufacturers from South Korea to Silicon Valley have hit a volatile stretch. Over several weeks, the rally in chip stocks has helped pull the market out of its Iran war funk. But semiconductor stocks slid on Friday and Monday. Journal reporter Jared Mitovich says investors are now looking to NVIDIA for direction.

4:23Berber Jin:There's a lot on the line here. It's almost a make or break moment for whether this chip rally can continue or whether that blip that we saw ending earlier this week could be signs that this rally is petering out a little bit. Investors were really looking for what NVIDIA's outlook is, not only in 2027, but even beyond that, what their spending looks like and where they see their business going later on this decade. There's almost no question that the AI build-out is succeeding and going to benefit companies like NVIDIA in the next 12 to 18 months. But now you're seeing traders scratch their heads and say, what happens after then?

4:55Berber Jin:Where does this go next? Reporting after the bell, chip giant NVIDIA said it had record sales and profit in its most recent quarter. Sales rose 85 percent to$81.6 billion, beating Wall Street's expectations. Surging demand for data center computing and the astronomical rise of artificial intelligence agents drove its earnings. Stock indexes climbed today as investors waited to hear those earnings from NVIDIA and for the SpaceX IPO paperwork to be publicly revealed. The Nasdaq led the gains and closed up 1.5 percent. Coming up, Target reported its strongest sales gains in years as its new CEO's turnaround efforts take hold.

5:33So why was its stock down today? More on that after the break.

5:44Berber Jin:Some of the best lessons don't come from a classroom. They come from experience. On The Power of Advice, a new podcast series from Capital Group, You'll hear from CEOs, investors, and founders about how they built careers, took risks, and reinvented themselves. If you're starting your own journey, this is the kind of advice you won't want to miss. Available wherever you get your podcasts. Published by Capital Client Group, Inc.

6:18Now for some legal news. The Trump administration has secured an indictment against Raul Castro, a leader of the Cuban Revolution and the country's former president. The charges relate to when the Cuban military shot down civilian planes flown by the humanitarian group Brothers to the Rescue in 1996. Castro was defense minister at the time. U.S. Acting Attorney General Todd Blanche announced the charges, which include murder, during a press conference in Miami this afternoon.

6:45Berber Jin:For the first time in nearly 70 years, senior leadership of the Cuban regime has been charged in this country, in the United States of America, for acts of violence resulting in the deaths of American citizens. Nations and their leaders cannot be permitted to target Americans, kill them, and not face accountability. Current and former officials don't expect Castro to be sent or taken by force to the U.S. to stand trial. But the indictment is a sharp escalation of the Trump administration's efforts to pressure the Cuban government into economic and political concessions. Two police officers who defended the Capitol during the attack on January 6, 2021, filed a lawsuit today seeking to stop the Trump administration's, quote, anti-weaponization fund, which we told you about earlier this week.

7:37The fund has drawn skepticism and criticism from both sides of the aisle. The acting attorney general, Todd Blanche, defended it in front of Congress yesterday. And speaking of Congress, Senate Republicans today said that they don't have the votes to preserve a billion dollars in funding tied to President Trump's ballroom project. The president has made clear he can make or break the career of any Republican in Congress. And in doing so, he's created a class of lawmakers who lost their primaries but are still in office. Republicans have begun referring to those outgoing senators as a, quote, YOLO caucus because they have little to lose in going against Trump.

8:11And the House of Representatives has passed a new version of a major housing bill. It's a big win for the real estate industry. The bill, which was approved 396 to 13, includes restrictions on institutional investors buying single-family homes. But it doesn't include a requirement that housing developers hated, forcing a sale of newly constructed rental homes within seven years of completing them. That provision was in the Senate version of the bill. The legislation now moves back to the Senate for final approval.

8:42In retail, today Target reported strong quarterly sales, the first sign that its turnaround efforts are starting to take hold. Comparable sales are a key retail metric. They cover online sales and stores that have been open for at least a year. And those sales rose 5.6 percent. It's the biggest quarterly increase since early 2022. For more on what's driving the growth, I'm joined now by Sarah Nassauer, who covers large retailers for the Journal. Sarah, this is the first quarter we're seeing results since Michael Fidelke took over as Target's CEO in February. He promised big changes to the company's operations to help turn it around.

9:16What do the earnings show about whether his plan is working? When Fidelke took over, he was very clear that really the number one thing they need to be doing is getting back to style and design and uniqueness in their product assortment. that they need to make sure that what they sell is differentiated from what you can get elsewhere. They've done some things in Baby and their toy department that they feel like shoppers are responding to them in a positive way. They're also investing in supply chain and improving customer service. But they also did really poorly last year in the same period, right?

9:49And so they're comparing it to a quarter where, you know, it's like an easy compare is what we say. And the stock slid today, ending down about 4%. Why did investors react so negatively? On the call, you know, the executives were emphasizing also just some macroeconomic uncertainty and that they want to be cautious. Also, the changes that Target is making are expensive. So I think investors are dealing with a really uncertain environment. And what Target was saying sort of spoke to some of that. That was WSJ reporter Sarah Nassauer. Thanks, Sarah. Thanks for having me.

10:28Longtime Congressman Barney Frank has died at the age of 86. The Massachusetts Democrat was a force in the Capitol for 32 years. He helped reshape the U.S. financial system after the 2008 financial crisis. The 2010 Dodd-Frank law that bears his name was Democrats' attempt to prevent another crisis. But Republicans and banking executives argued that the law stifled innovation. And in the years since, Congress and later administrations have narrowed the law's reach. Frank was also known for much of his career as the country's most prominent openly gay politician.

11:04And finally, we go to Harvard, where the era of the A grade may be nearing an end. Today, Harvard's faculty voted to cap the number of A's per course to 20 percent. The change is part of the college's years-long effort to curb grade inflation. In Harvard's last academic year, about 60 percent of grades were A's. The change comes even after strong backlash from Harvard students. However, the cap doesn't apply to A-minuses, which are expected to take over as the most awarded grade. And that's what's news for this Wednesday afternoon. Today's show is produced by Danny Lewis and Alexis Moore with supervising producer Tali Arbel.

11:39I'm Alex Oseleff for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

12:20Berber Jin:Transcription by CastingWords dot com slash take on the week to subscribe now.