Artificial intelligence (AI) is addicted to money. The major labs developing AI models are intoxicated with the dollars that will finance the technology’s evolution. The three leading companies in the sector, Anthropic, OpenAI and SpaceX, have announced in recent days plans to go public to raise more funds in an endless race. Other long-established tech multinationals such as Google, Microsoft, Meta and Amazon have also launched financial operations in what is shaping up to be the biggest capital raising effort in the sector’s history.
“There are things we want to do that are likely easier as a private company,” OpenAI said Monday in a statement announcing its intention to debut on the stock market. “But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”
These AI labs (OpenAI, Anthropic and SpaceX) are disrupting the financial markets. In less than six months they will join the equity market to raise about $200 billion, with a combined valuation for the three startups that could reach $3.6 trillion according to current estimates.
“The tech companies planning IPOs this year are overvalued due to the strong enthusiasm in the sector,” says Michele Morganti, senior markets strategist at Generali. The Italian analyst, who prescribes caution given the risks associated with the sector and the geopolitical moment, concedes: “Although investor enthusiasm for the tech and artificial intelligence sector is clearly strong, it is also backed by solid demand and expectations of significant growth in AI adoption.”
SpaceX has taken the lead in this investors’ race. It is expected to debut on the stock market this Friday to raise some $75 billion by selling less than 5% of its equity. The transaction would value the rocket company founded by Elon Musk in 2002 at $1.8 trillion, more than the annual wealth generated by Spain. Elon Musk, who would retain 84% of the company’s shares, would become the first person with a net worth close to $3 trillion. Once completed, SpaceX’s IPO will make Saudi oil giant Aramco’s 2019 listing — which raised $29 billion and has until now been a milestone in global financial history — look like child’s play.
Although Space Exploration Technologies Corporation, the company’s legal name, was founded with the goal of establishing a colony on Mars to make humanity multiplanetary, it is now much more than that. It specializes in launching boosters to deploy satellites and other infrastructure, offers the Starlink telecommunications service that provides internet access from remote and hard-to-reach locations, and—above all—develops AI models through its subsidiary xAI, which created the Grok tool that is integrated into X (formerly Twitter). Elon Musk does not conceal the fact that the purpose of SpaceX’s IPO is to obtain more resources to continue developing xAI’s business, with new data centers and other utilities.
Anthropic and OpenAI are examples of how two small tech labs became giants. After taking part in some of the most surprising and largest funding rounds in recent years, they are now preparing to jump to Wall Street to capitalize on the market frenzy.
“The combined valuation of these companies [including Anthropic, OpenAI, SpaceX and others such as Databricks, Stripe or Anduril] could reach $4.6 trillion. By comparison, the total value of all IPOs carried out since the founding of the New York Stock Exchange in 1792 amounts to roughly $1.5 trillion,” says François Rimeu, senior strategist at Crédit Mutuel Asset Management, who points out: “Even so, the immediate impact on market liquidity will probably be limited at first, since these companies are expected to raise only around 10% of their total market capitalization.”
OpenAI completed the largest funding round in Silicon Valley history this spring, raising $122 billion. The operation gave the company led by the controversial Sam Altman a value of $852 billion. Just a few weeks ago, Anthropic also closed a round that raised $65 billion from private investors, giving it a valuation of $965 billion.
But they are not the only ones needing resources to succeed in the AI business. Alphabet, Microsoft, Amazon and Meta are also engaged in a frantic race that consumes huge amounts of money. These capital needs, in any case, match the greed of investors who do not want to be left off the AI train. The explosive mix is an exorbitant amount of investment in an industry built on promises about the future. The parent company of the world’s most famous search engine, Google, announced last week that it has issued $85 billion in shares to finance its growing AI investment plans. The operation is considered the largest equity fundraiser in history. Meta borrowed $25 billion this spring and Amazon issued about $40 billion in bonds just a few weeks ago.
The strategy fuels doubts about market liquidity. Voices are beginning to warn that it may not be deep enough to support all the sector’s funding rounds and IPOs. “At first glance, concerns about the market’s absorption capacity seem justified. The concentration of IPOs and capital raises by large-cap companies (Alphabet, Meta) over a relatively short period raises the fear that the supply of shares will far exceed demand,” admits Clémence Rusek, chief investment strategist at Vontobel. “However, the underlying data suggest otherwise. It is likely that the proposed structures imply that only between 5% and 6% of the total shares will be put up for sale initially, which means the effective supply entering the market at listing could be considerably lower than overall valuations suggest.” Rusek concludes: “Despite record figures, the total supply of shares is expected to represent only about 1% of total market capitalization.”
Companies in the sector are in a hurry to evolve their models. The winner will be the first to reach the goal: a model that is profitable, generates sufficient revenue and keeps costs contained. But along the way they are spending huge sums to train these software programs. Training takes place in data centers that require hundreds of computers and servers equipped with the world’s most advanced microprocessors. These chips are neither abundant nor cheap. Energy and water consumption to maintain these AI gyms forces companies to build small power plants and make astronomical investments.
Analysts expect the largest companies in the sector to invest more than $750 billion this year alone in data centers and tool development. Never in history, not even during the railway boom in the second half of the 19th century, has capital been consumed with such intensity in such a short time. The AI fever threatens to become a bubble. Companies are not yet reporting profits; they are only showing losses. OpenAI, founded in 2015 as a nonprofit lab to create a new technology, planted the seed of an AI assistant known as ChatGPT in 2022.
Since then it has seen its arch-rival Anthropic take the lead by focusing its business on enterprise solutions. The company founded by Dario Amodei and a group of employees unhappy with Sam Altman’s management at OpenAI is managing to increase its revenues—its billing is expected to double in the second quarter, according to The Wall Street Journal—and stabilize its accounts. Although they acknowledge they will not deliver consistent profits until at least 2030.
Many analysts ask whether this AI frenzy will trigger a seismic shift. Shannon L. Saccocia, chief investment officer at Neuberger, argues that many index funds, which track major indices, will rush to buy these companies’ shares when they are included in the indexes. “The mechanical buying pressure is considerable: our base scenario indicates that index funds could absorb 24% of the free float by day 15. That means passive investors will own shares of SpaceX without having made an active decision to buy them.” The Neuberger economist adds: “If SpaceX, OpenAI and Anthropic achieve full index inclusion in the coming quarters or years, the landscape of U.S. stock indexes will change radically. It will become even more growth-oriented, trading at higher multiples, and the historical valuation tools investors have relied on for so long will become increasingly difficult to apply.” Investor voracity and AI’s capital needs are set to make 2026 the year of the largest public offerings in history.
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