> If OpenAI does not make profit within two years, the "investment" will turn into a loan, which probably means bankruptcy.

I don’t believe this is accurate. I think this is what you’re referring to?:

Under the terms of the new investment round, OpenAI has two years to transform into a for-profit business or its funding will convert into debt, according to documents reviewed by The Times.

That just means investors want the business to be converted from a nonprofit entity into a regular for-profit entity. Not that they need to make a profit in 2 years, which is not typically an expectation for a company still trying to grow and capture market share.

Source: https://www.nytimes.com/2024/10/02/technology/openai-valuati...

I think for anyone who has been intimately involved with this last generation of "unicorns", it really does not look like an "exit" if that means bankruptcy, end of the company, betrayal of goals, or what have you: for a high-growth startup of approximately ten years, finding liquidity for employees is perhaps counter-intuitively a sign of deep maturity and that the company is concerned for the long haul (and that investors/the market believe this is likely).

At about the ten year mark, there has to be a changing of the guards from the foot soldiers who give their all that an unlikely institution could come to exist in the world at scale to people concerned more with stabilizing that institution and ensuring its continuity. In almost every company that has reached such scale in the last decade, this has often meant a transition from an executive team formed of early employees to a more senior C-team from elsewhere with a different skillset. In a world context where the largest companies are more likely to stay private than IPO, it's a profoundly important move to allow some liquidity for longterm employees, who otherwise might be forced to stay working at the company long past physical burnout.

Agreed. These liquidity events are a way to retain and reward early employees while allowing the founders to recover their personal finances and buckle down for the growth phase.

> In a world context where the largest companies are more likely to stay private than IPO

Which world is this?

From a Scottish Mortgage report: "companies are staying private for longer and until higher valuations".

    Amazon founded in 1994
    1997 listed at $400m
    Google founded in 1998 
    2004 listed at $23bn
    Spotify founded in 2006
    2018 listed at $27bn
    Airbnb founded in 2008
    2020 listed at $47bn
    Epic games founded in 1991
    2022 unlisted value $32bn
    Space Exploration founded in 2002
    2022 unlisted value $125bn
    ByteDance founded in 2012
    2022 unlisted value $360bn

The only unlisted business there that could be considered among “the largest” is ByteDance. But they have a whole China thing going on, so not very representative of US/European markets.

I doubt any competitor to the largest businesses in US//Europe that is actually putting up good audited numbers is staying private. Even Stripe has been trying to go public, but it doesn’t have the numbers for the owners to want to yet.

SpaceX hasn’t tried to go public , arguably being private has helped them ability to raise a lot of money from investors is key to their successes.

Their kind of product development [1] needs a long term thinking which public markets will not not support well

[1] ignore all the mars noise, just consider reusable i.e. cheap rockets and starlink

It’s never just about the company’s numbers, but the financial environment. When interest rates come down enough to tempt investors out of the money market, you’re likely to see a new wave of IPOs.

Agreed. OP is crossing some wires. More companies are staying private right now (not by choice). Not necessarily or only the “largest companies”

Related: https://www.wheresyoured.at/oai-business/