Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

rconti

So they're not just racing to gain dominance in AI, they're also racing to IPO before the music stops? IPOing and getting a bunch of cash, even if your stock subsequently suffers in the crash, is a lot better than being unable to get that capital infusion before the house of cards collapses.

Johnny_Bonk

What a headline

hootz

So, The Economist's paywall is unbypassable?

paulpauper

Why wouldn't it? There huge demand for these shares. It's not like $3+ trillion is dumped at once. It's a tiny percentage of it, and the high multiple does the rest of the work.

timmg

The way I've been thinking about it: there is too much money trying to pour into the market. That's why valuations are so high. Maybe getting more of these big private companies public will bring valuations down a bit. (Just my impression. No math or financial studies behind it :)

JumpCrisscross

Net buying of corporate equities by American households, trusts, funds and non-profits has averaged $660bn per year for the last few years [1]. $200bn is not fundamentally a stretch for the American equity markets, let alone capital markets more broadly. [1] https://www.federalreserve.gov/releases/z1/20260319/html/f22... line 16, 2023 to 2025

jmyeet

So what people seem to be unaware of or are purposely ignoring is that OpenAI and Anthropic have invested trillions in a rapdily depreciating asset. There was a HN post from a day or two ago where someone bought a V100 for 150 pounds and connected it to their computer. Well that was a $10k GPU in 2017. That's the fate of H100/B100 GPUs in 5-10 years (and I suspect closer to 5). What do you do if you've invested $1 trillion that will be worth $100 billion or less in 5 years? I think it'll be worse than that because modern hardware at that time will still probably be the same Wattage but have much higher performance so you'll be getting much higher performance-per-Watt and that's going to really matter. The only company I'm confident will survive this hardware crunch and still be relatively successful in this space is Google. OpenAI in particular is a bet that there will be an AI moat and that OpenAI will "win". I don't think there will be a moat and China is a big reason why (eg DeepSeek). SpaceX is a little different. Yes, launching rockets is a business but it's not a trillion dollar business. 100 Falcon 9 launches doesn't even break $10 billion in revenue. Plus, Starship faces cost overruns, delays and significant headwinds. But the real kicker is that SpaceX was used to bail out Elon from the Twitter purchase and the xAI investors from the first Twitter bailout. That's a problem because xAI is burning $1 billion a month in a company where that really matters and I don't think Grok will "win" here. Like, at all. SpaceX would be a significantly more attractive company without xAI. The big potential growth area is Starlink. For that to justify this valuation I think you need handheld Starlink phones. That requires a lot of satellites at a relatively low orbit, which also means they have a relatively short life (because they burn up in the atmosphere). And for that Starship must succeed. All the AI data center in space stuff is complete bullshit. It makes no sense. It'll never be viable. It's not going to happen. EDIT: let me clarify because I was careless in my wording. So, Anthropic individually has not spent "trillions". That was more of a general statement on AI spending. Anthropic has raised ~$100B, the last round of which was $65B (at $965B post-money IIRC). This industry as a whole needs to recoup trillions. Anthropic seems to be in a better position (as a business) than OpeNAI is but I do think the it's a race to cash out before depreciating assets, well, drepreciate and there's the real risk as compute becomes cheaper and the AI craze wears off, Claude just may not have the growth trajectory that is built into the price.

SilverElfin

Can the stock market remain legitimate after such a brazen example of dumping? Regular everyday people can’t access private shares and participate in upside even if they want to. They don’t have the connections like VCs, and aren’t accredited investors. And companies ban secondary transactions, which should be forced by law to be always allowed. And then after all that, the public have to deal with their index funds, ETFs, mutual funds, pensions, 401ks, etc buying up these overpriced stocks. You have a space company that also acquired a failing social media platform and failing AI company with little revenue justification for the valuation, and a lot of other obligations that make it financially a disaster (like payments owed for spectrum). And two frontier labs with no real moats, each looking for regulatory capture based on safety or ethics or whatever. To the everyday person, the stock market after the fast listing rule, these three IPOs, and AI job loss, will feel no more legitimate than prediction markets or crypto.

SomaticPirate

No doubt these companies are woefully overvalued. But this won’t stop me from putting in orders for several thousand dollars of shares with at market open. There will undoubtedly be plenty of buyers and I expect them to gain rapid entry into the indexes which will unlock a flood of additional capital from 401ks and pensions

d_burfoot

> Firms in the broad Russell 3000 share index have a total market value of $79trn I sometimes try to get people to worry about the catastrophic state of American public finances by pointing out that the net national debt, including unfunded liabilities, is estimated to be $175T [0]. The government could appropriate all the equity from the top 3000 largest companies, and also the entire real estate market, and it still would not be able to pay its debt (RE market is $55T). [0] https://balajis.com/p/americas-175-trillion-problem

joegibbs

Anthropic at $1t for an IPO vs Google at $23b in 2004 sounds insane but Google's revenue at the time was $2.7b while Anthropic's already at $47b, so a valuation at about 20x vs 10x revenue. Anthropic also has very high revenue growth (50x since 2024), it doesn't seems quite as insane as it could be.

ravenstine

All these things are apparently valued at trillions of dollars these days. Where's the trillions, or hundreds of billions worth in improved quality of life? What has gotten better other than the ability to produce more crap?

golden-face

Feels more like: can the bond market handle any potential outflows as money is rotated into these IPOs?

megadragon9

I don't think the market will swallow the stock offerings until we see early signs of GDP growth attributable to these entities. But until then, I think the cost is higher than the benefit, which "The dead economy theory" essay covered it well [0] [0]: https://www.owenmcgrann.com/p/the-dead-economy-theory

augstein

For SpaceX (and possible the others): Yes it can, since they changed the rules to force over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations. From https://x.com/Hedgeye/status/2060435253928604065 : "Rule changes for the SpaceX $SPCX IPO: Index providers waived the profitability requirement and cut the seasoning window from 90 days to 5. This forces over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations. Bloomberg Intelligence estimates S&P 500 funds must absorb 19% of SpaceX's float within 6 months. Russell 1000 and Nasdaq 100 funds will absorb 24%. The rules built to protect passive investors: 1. S&P 500 has required 12 months of trading and 4 quarters of GAAP profitability since 2002. Both waived. 2. Nasdaq cut its inclusion window from 90 trading days to 15. 3. FTSE Russell cut its to 5. All three benchmarks are now structured to buy SpaceX at IPO pricing."

rvz

How long have the SpaceX, OpenAI and Anthropic investors been waiting for an IPO (excluding tender offers)? 24 years, 10 years, and 5 years. You really think they are going to hold off against selling for multi-millions for another year, especially SpaceX? OpenAI (and especially) Anthropic are at risk from being undercut by the Chinese labs and their open-weight models and may cause their valuations to be questioned. If that doesn't cause a correction, then SpaceX will do it for them. There is no lock up for the 5% of shares being available.

BLKNSLVR

Is SpaceX going to eat Tesla? As in, are a bunch of Tesla investors going to be migrating across to SpaceX since that seems to be getting more of Elon's attention these days, especially with xAI barnacled onto the side of it? The money to participate in the IPO has to come from somewhere...

worik

What is the value proposition for Space-X? As far as I can tell it is in machines they cannot make work, servicing markets that do not exist for a service that will not matter for 20-years. That and a third rate AI company that no body wants, except to get rid of. This will probably go swimmingly at the start - but as time goes by and they raise more capital, Musk snorts more K and the glory fades, what then?

skybrian

From Matt Levine’s column today: > The index demand is not 100% of the stock available in the IPO, or 110%, or even 50%. But it’s plausibly more than 25%. It’s not a short squeeze, but it’s a lot. Add a reported 30% allocation to retail, and arguably a majority of the IPO is being sold to price-insensitive investors. That is one way to get a high IPO price.