AI labs race to go public in $200 billion capital push that could reshape stock markets
SpaceX, OpenAI and Anthropic plan to raise roughly $200 billion through public offerings in the next six months, marking the largest capital mobilization in tech history. The three companies could reach a combined valuation of $3.6 trillion-more than the total value of all IPOs conducted since the New York Stock Exchange opened in 1792.
SpaceX leads the charge. The rocket company is expected to debut on the stock market this Friday, raising about $75 billion by selling less than 5% of its equity. The offering would value SpaceX at $1.8 trillion, with founder Elon Musk retaining 84% of shares and seeing his net worth approach $3 trillion.
OpenAI and Anthropic follow with their own public debuts. OpenAI completed the largest funding round in Silicon Valley history this spring-$122 billion-giving it a valuation of $852 billion. Anthropic raised $65 billion from private investors just weeks ago, valuing the company at $965 billion.
Established tech giants are also raising capital at scale. Alphabet issued $85 billion in shares last week, the largest equity offering in history. Meta borrowed $25 billion this spring, while Amazon issued $40 billion in bonds.
Why the rush for cash
AI development consumes capital at an unprecedented rate. Training large language models requires hundreds of computers and advanced microprocessors in data centers that demand enormous power and water. Analysts expect the largest companies in the sector to invest more than $750 billion this year alone in data centers and tool development.
OpenAI said in a statement announcing its IPO plans: "There are things we want to do that are likely easier as a private company. But it's a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best."
None of the major AI labs are yet profitable. OpenAI, founded in 2015, launched ChatGPT in 2022 and has since accumulated losses. Anthropic, led by Dario Amodei, is managing to increase revenues and stabilize accounts but does not expect consistent profits until at least 2030.
Market absorption concerns
The concentration of offerings raises questions about whether markets can absorb the supply. Michele Morganti, senior markets strategist at Generali Investments, said: "The tech companies planning IPOs this year are overvalued due to the strong enthusiasm in the sector."
However, initial supply concerns may be overstated. The proposed structures suggest only 5% to 6% of total shares will be offered initially, meaning the effective supply entering markets could be considerably lower than overall valuations suggest. Clémence Rusek, chief investment strategist at Vontobel, said the total supply of shares is expected to represent only about 1% of total market capitalization despite record figures.
Index funds pose a different risk. When these companies join major indices, passive funds will automatically purchase shares. Shannon L. Saccocia, chief investment officer at Neuberger, estimates that index funds could absorb 24% of SpaceX's free float by day 15 of trading. "Passive investors will own shares of SpaceX without having made an active decision to buy them," Saccocia said.
If SpaceX, OpenAI and Anthropic achieve full index inclusion, U.S. stock indexes will shift toward growth stocks trading at higher multiples. Historical valuation tools will become increasingly difficult to apply.
The underlying question
The sector operates on promises about future profitability rather than current earnings. The winner will be the first company to reach a profitable, revenue-generating model with contained costs. Until then, the industry is spending heavily to train software programs that may or may not deliver returns.
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