OpenAI is barreling toward what could be one of the most consequential IPOs in tech history. The company could be valued at as much as $850 billion, a number that makes the governance questions feel less like academic exercises and more like material risks for future shareholders.

The conflict-of-interest questions

Republican state attorneys general from six states have asked the SEC to review Sam Altman and OpenAI for potential conflicts of interest ahead of the public offering.

GOP letters to the SEC allege that Altman encouraged OpenAI to invest in Helion Energy and Stoke Space, two companies in which he holds substantial personal stakes.

OpenAI president Greg Brockman’s court disclosures highlight a nearly $30 billion equity stake and financial ties to Altman’s ventures, raising pointed questions about whether the company’s leadership can exercise genuine independence when evaluating deals connected to the CEO’s portfolio.

A governance track record that doesn’t help

In November 2023, OpenAI’s board abruptly fired Altman as CEO. The move was reportedly connected to concerns about his leadership and transparency. Within days, Altman was reinstated under pressure from employees, investors, and Microsoft, OpenAI’s most important partner.

That history matters now because the company is transitioning from a nonprofit-controlled structure to a for-profit entity capable of going public. Critics, including Elon Musk, have challenged the conversion in court, arguing that OpenAI’s original nonprofit mission is being abandoned in favor of commercial interests.

The political dimension

The involvement of Republican attorneys general signals that OpenAI’s governance problems have crossed from the business pages into the political arena. State-level officials asking the SEC to investigate a company’s CEO ahead of an IPO is not routine.

Altman has referenced over $1.4 trillion in commitments to build AI infrastructure, a figure that underscores both the capital intensity of OpenAI’s vision and the systemic importance the company is claiming for itself.

What this means for investors

An $850 billion valuation would make OpenAI one of the most valuable companies to ever go public. The governance concerns create a specific kind of risk: related-party transactions, if poorly managed, can erode shareholder value by directing resources toward deals that benefit insiders rather than the company. The fact that multiple government entities are already asking questions means this risk is not theoretical. It’s being actively investigated.

OpenAI faces rising competition from Google, Anthropic, Meta, and a growing roster of open-source alternatives. The November 2023 board crisis established a precedent that should give prospective shareholders pause, as the company’s governance mechanisms proved unable to withstand internal pressure when Altman was running a private company.