Unicorns, or startups valued at $1 billion or more, are hardly a rare sight in generative A.I. In fact, leading players like OpenAI and Anthropic are seeing their valuations soar past tens of billions of dollars, leading tech financiers to wonder if—and when—these A.I. darlings will go public. Experts say A.I. startups may hold off on considering IPOs because of unpredictable revenue prospects, generous private investments, and an evolving regulatory landscape amid a challenging market.

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As of May 2024, 12 of the 28 startups that had reached the unicorn status this year were A.I. companies, according to BestBrokers. Perplexity AI, an A.I.-powered search engine, is reportedly in talks to raise $500 million in a round that could valued the just two-year-old company at $8 billion or more. The Jeff Bezos-backed startup is part of a growing batch of A.I. companies dominating the unicorn list, including the $80 billion OpenAI, the $30 billion Anthropic and the $7 billion Scale AI.

It’s typical for a private company to consider an IPO when it becomes unicorns. Going public has the potential to significantly increase a company’s access to capital by allowing it to sell equity to the public. IPOs can also boost brand awareness........

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