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?
In terms of SpaceX (the space portion of it) they've produced the cheapest way to get any payload into space. If you pay anybody else, you will overpay drastically depending on who you want to take your payload into space.
In terms of AI, we've seen even here on HN everything from mathematical problems that remaind unsolved, being solved, mathematical proofs being used to disprove theories, heck we even learned more about alzheimers, new antibiotics, precision targeting in oncology, using AI to flag healthcare anomalies in imaging. The benefits are easy to miss, but they're snowballing into place, there's definitely an explosion of useless crap, but you have to look for the real things and you will come to find, that AI is giving us things we otherwise either might not have discovered or wouldn't have within our lifetimes.
Comments like these make me feel like we're living in different worlds. I use LLMs multiple times a day and they've significantly improved my quality of life. They are also steadily becoming more useful over time (e.g. now solving math problems).
Try to keep perspective, these valuations are just functions of the stock market the end result of some spreadsheet. They have nothing to do with quality of life. Why would you relate those two things in the first place?
Raven, Raven.. that's for those who can borrow against that to know and you to likely never find out.
What you thought your life would improve? Didn't you hear, wages are only increasing, why don't you invest some of that sweet cash into @JumpCrissCross' fund, it'll be alright. What were you going to do with healthcare anyway?
> Where's the trillions, or hundreds of billions worth in improved quality of life?
I think these IPOs are going to mint tens of thousands of new millionaires or something. That, in turn, will generate massive tax windfalls for all levels of government.
> other than the ability to produce more crap?
This is a big "other than." (And to be clear, the jury is still out on whether AI will let us produce more in the long run.)
I think this is the story of tech in general. In my life, I've seen 3 really big steps down for the middle class: 2001, 2008 and then covid. Basic necessities are expensive today - people point to high GDP but what I see is high prices and poverty. And Tech, we've built a dystopian surveillance state.
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.
What’s defensible about Anthropic’s revenue? It seems like OpenAI and others are equivalent. Open weight models are catching up. Google has ads networks, video platforms, and so much more.
I am skeptical that Anthropic and OpenAI can defend their dominance for long enough to make meaningful gaap accounted profits
Anthropic is profitable unlike OpenAI though. Sure they'll owe a lot of money for probably decades, but if they remain profitable moving forward, it will be worthwhile.
The faster your cash loses value, the stronger your incentive to trade it for something else. That something else can be financial assets.
> It's not got loads to do with large-scale, institutional investments
For investors, particularly retail investors, the consumer price index is most relevant. But for whatever it's worth, producer prices are up over 16% in April (7% excluding "foods, energy, and trade services," which jumped over 50% annualized) [1].
To be clear, I'm floating a hypothesis here. I have seen no evidence linking inflation to demand for these companies' shares. (If anything, it should be the inverse.)
That depends. Inflation is a measure of the cost of living in terms of currency. It can be high either if goods and services required for living become scarce, or if currency supply increases. Currency supply increasing does affect asset prices.
Right now SPY not be such a great idea with SpaceX launch upcoming since it will be included into it immediately. Retail investors will be bearing that particular flop's cost.
I was old enough to remember the 08 crash. Then the market starting recovering in 2011/2012 and the sentiment was that the system would crash again soon like 08. Turns out, it was an amazing time to invest.
Post 08 crash, all sorts of conspiracy websites like Zero Hedge were popular saying how the world economy would keep crashing.
I am old enough to have had multiple career changes since starting on a major firm’s rates floor in 2008. These IPOs are tiny compared to the overall stock market and the stock market is absolutely tiny compared to debt markets. People consistently underestimate the size of the world economy or even their local economy. The world may look small from an orion capsule near the moon but almost every aspect of human society is bigger than most people can reason about. It is possible these IPOs have an outsized impact on sentiment for weird reasons. But it won’t be an actual outsized impact on capital markets.
Edit: I should add the AI bubble can absolutely burst but there is no reason to believe these IPOs are the end of the ride. If I knew I would be…
no one is going to get wealthy buying SPY/VOO. you might get rich, but not wealthy. things have changed now in a sense that handful of companies are large percentage of the stock market to the point where one has to question why invest in “s&p 500” vs “s&p 25-ish”
while going with the tried&true makes some sense, I think we have to open our eyes to a different reality of our stock market… and this market concentration into few companies is going to get a lot worse…
> things have changed now in a sense that handful of companies are large percentage of the stock market to the point where one has to question why invest in “s&p 500” vs “s&p 25-ish”
A small number of companies have always driven most stock-market gains. Betting on size isn't fundamentally a bad bet. But it is a bet against value and the historical tendency for small companies to be higher risk and higher reward.
you may be technically correct but today’s concentration in say top 10-15 companies is historic and by significant margin. I have been self-employed for a long time and somewhat “forced” into being “an investor” and starting in 2021-2022-ish I took my money out of all the “funds” … while I do not disagree that it is “a bet” - it is a calculated bet. things are different now even if historically you are right, no question
I very much disagree that it's coming. I think we need to completely reset our expectations of how the market works. There's been nearly an entire generation working in this "new" bull market, where things like EPS mean absolutely nothing and speculation no longer requires actual returns.
> the crash (that we all know is coming) will do that. Until then, history teaches that we'll just keep going up and up
Stock prices don't have to crash. They can just stagnate while profits catch up and multiples compress.
Debt binges, on the other hand, tend to go bust with a bang. But after the recent private-credit scare, the AI build-out has been predominantly financed with stock. (I think.)
Hasn't there been a _lot_ of debt to buy up Nvidia GPUs? I follow this stuff somewhat closely and it feels intentionally confusing, so I've likely lost track.
> Hasn't there been a _lot_ of debt to buy up Nvidia GPUs?
I believe that's been concentrated at the hyperscaler layer, and subsided when the aforementioned private-credit scare reared its head. (I haven't heard a big datacenter debt deal announced in a while. Though of course that doesn't mean they aren't being done.)
> Equity bubbles don't have to crash. Prices can just stagnate while profits catch up and multiples compress.
Is there is historical evidence for that? As someone who used to follow Jeremy Grantham a lot (he considered himself a "bubble historian"), IIRC every bubble he studied always mean reverted, and it usually (maybe always, can't remember) overshot on the downside during the correction.
> IIRC every bubble he studied always mean reverted
This really depends on how we're defining these things. Let's call a stock-market bubble a period of elevated multiples. That can mean revert by prices decreasing while earnings stay constant or by prices staying constant and earnings rising. (Alternatively, both earnings and multiples can rise and fall.)
Yes, for equity prices in particular he talks about P/E ratios (among some other metrics like corporate profit margins), and so you're right, it would be possible for this to mean revert by prices holding stagnant and earnings catching up. However, as far as I can remember (primarily because a big emphasis of his was how unchecked bubbles can cause a lot of damage on the downside) all the historical bubbles he studied (something like 50) always crashed with a big price drop. Not 100% sure though, which is why I was curious if you had any contrary examples.
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.
30% above the average. Households bought $1.6 trillion in Q3 of 2025, for example. (Foreigners bought a further $650 and $700 billion in Q3 and Q4, respectively.)
> A third of all spending is not fundamentally a stretch?
Where did you get spending? That's net buying of stocks by non-financial Americans. It's the new money that has, on average, gone into the U.S. stock market from that section of investors every year. A third of it going into these new issuances doesn't need to break anything.
Dumb question here, but would it necessarily mean the other stocks they might've bought (i.e. the rest of the market) will not get the cash infusion and will thus likely drop in valuation?
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.
I don't think OpenAI or Anthropic are predicting that the AI market is going to collapse. In fact, I think both are bullish that the public still isn't pricing in exponential growth.
I think what is happening is that OpenAI is racing to IPO before Anthropic because their growth isn't as impressive. If you are the weaker company, you should IPO first to lock up the cash.
I can’t imagine them actually being bullish about exponential growth, when both seem instead to be stagnating. I’m more inclined to believe they’re just maintaining a level of hype in public because that’s what you do.
They’ve claimed a big revenue run rate for this quarter. But it’s non-GAAP, so you kind of have to assume shenanigans. Earlier this year they were telling a court their revenue was like 1/4 of what they had told the public. I consider the number they came up with when they had to worry about committing perjury to be more trustworthy (because I’m a pill), so that would also indicate shenanigans. My guess is they are inflating that revenue run rate figure by booking token pre-payments from enterprise contracts now instead of spreading it over time as GAAP would mandate. And at the same time their big enterprise clients are talking about scaling back their usage.
So we’ve got a combination of signs that they’ve been inflating their revenue growth, and signs that their customers are losing their appetite for contributing to that revenue growth. I suppose it’s not a slam dunk, but it feels to me like as strong an indicator as one could hope for a private blitzscaler startup like this.
Oh, to be clear, I'm not saying there is evidence they're all a-okay. I just hadn't seen any evidence that they were stalling out. (I have for OpenAI.)
> Perhaps they’re afraid announcement would trigger divestment
S&P don't get a choice around whether they announce their methodology or not.
That said, the rule change at the NASDAQ 100 doesn't seem to have impacted pricing or allocation. I can't imagine that many people are that concerned about this. (I posted the public-comment request from S&P to HN [1]. The response was crickets.)
It's worse for the new investors. (If it crashes.) It's great for the old investors. They got an opportunity to sell if they wanted. If they didn't, they still own their shares, except in a company that has that IPO cash sitting in its account.
People keep predicting "house of cards" and keep being wrong. AI bubble was supposed to burst as far back as 2023. When was the last time since 2009 there was a $500+ billion tech valuation that lost 90% or more? After a certain point , 100% market penetration is achieved and these products become mainstream and profitability follows. See Uber and Tesla for examples.
The old saying goes, the market can remain irrational longer than you can remain solvent.
I’m not necessarily expecting a crash any time soon. (But we average a major correction, what? every 8 years? So if you keep predicting one long enough you will eventually have been right all along.) But I do feel comfortable saying OpenAI and Anthropic are overpriced. For more or less the same reason Cisco was overpriced in the late ‘90s. It’s not that what they were making wasn’t valuable; it’s that we got out over our skis a bit over how much of it the world could actually manage to consume in the immediate future.
> After a certain point , 100% market penetration is achieved and these products become mainstream and profitability follows. See Uber and Tesla for examples.
Groupon got to pretty much 100% penetration, still crashed and burned right after IPO. I think Zynga followed a similar trajectory.
> people always think everything is fine ... until it isn't
History is also replete with people constantly predicting collapses that don't come. Timing the market is very hard with numbers, it's total nonsense if one is just going off vibes.
Anthropic, SpaceX and OpenAI are not banks. (Also, we had the largest bank runs in American history three years ago. The ordinary American barely noticed.)
And these equity-investors, do they use their own money to buy the (presumably non-voting) stocks?
Cause if that's the case, I see no reason for a government bailout should things go south. Nobody's pension would be affected by some private investor losing money on a bad investment.
But if that's not the case, then someone somewhere along the chain is acting as a bank, subject to a vibe-driven run.
If note the dotcom boom lasted from about 1995 until 2000. Housing bubble longer. Theres no time table on when the bubble bursts, and the web didn’t die and neither did housing when the burst happened. It is just a reset and consolidation of overtly excessive speculation. It’s not like the bust leads to an end of civilization.
> 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).
The $175T number is unfair because it treats Social Security and Medicare/aid as a liability instead of the service that they are. You might as well say the US is in infinite debt, because we'll always be paying something for our military every year, so infinity years * any dollars = infinite debt.
Also: All of those numbers you use to scare people are way, way off.
The NATO treaty says that we have to maintain our ability to resist armed attack, so there is some minimum. And we’ve made public commitments to spend at least 2% of GDP (though that isn’t part of the treaty).
SS and Medicare aren’t debts either in that sense. Congress can reduce benefits if they please.
In Flemming v. Nestor SCOTUS ruled that SS benefits are not guaranteed contractual rights but are instead statutory entitlements that Congress may modify or revoke.
Including all of the Social Security obligations for the current population is nonsense. For one it is money that will be paid from now for another ~60 years, and for 2 it's something that probably will just get cut as the trust fund starts getting into dire straits. It's not really an obligation if it's one act of congress away from being fixed (and without doing something like a debt jubilee that would destroy the dollar).
The rest of your article is complete bogus and the economic equivalent of climate change denial.
The U.S. Treasury publishes a daily total of the national debt, which as of May 2026 was $39 trillion.
a little less than half of the total national debt is owed to the "Federal Reserve and intragovernmental holdings"
In December 2020, foreigners held 33% ($7 trillion out of $21.6 trillion) of publicly held U.S. debt
Government debt isn't like personal debt or business debt. The treasury can choose to not honur it, and there's nothing anybody can do about it. Of course they're not going to find a market to sell more debt to after that, but wouldn't you say they already have enough?
No sympathy for people and institutions who make deals with the devil and expect the government to forever enslave taxpayers to honour those deals and pay back with interest.
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]
> don't think the market will swallow the stock offerings until we see early signs of GDP growth attributable to these entities
Investors in these companies are going to be looking for revenue and pathway to profitability. I'm not sure anyone needs to see an impact on GDP to invest.
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
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.
> then they have to deal with their index funds, ETFs, mutual funds, pensions, 401ks, etc buying up overpriced stocks
Only about a third of American stocks are held by passive capital [1]. Out of that, index funds are about 16%, and most of those in America reference the S&P 500, which has not yet announced whether it is changing its rules.
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.
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.
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.
Starlink Mobile (i.e. Starlink direct-to-cellphone without modifications) is already happening, and fast. Phones that have the recently announced Qualcomm X105 modem will support Starlink Mobile 5G at speeds up to 150Mbps, direct from satellite. The Qualcomm X105 modem will be in most Android flagship phones coming later this year, and by 2027 most new phones will support Starlink direct-to-cell. The next iPhone that supports the 3GPP Rel-19 standard will too.
The rollout relies on Starlink V3 sats, which can only be launched Starship, but Starship progress is going well and is already able to deploy satellites from orbit. SpaceX is capable of launching Starlink V3 on the current iteration of Starship, but they want more testing. We'll probably see Starlink V3 launching late this year or early next year.
"OpenAI and Anthropic have invested trillions in a rapdily depreciating asset".
Anthropic raised a bit over 100B and has 47B ARR. Where are you getting trillions from ?
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."
S&P has not finalized a rule change yet.
Why? It could be sudden. It could be slow and gradual. I've seen no reason it needs to be one versus the other.
In terms of AI, we've seen even here on HN everything from mathematical problems that remaind unsolved, being solved, mathematical proofs being used to disprove theories, heck we even learned more about alzheimers, new antibiotics, precision targeting in oncology, using AI to flag healthcare anomalies in imaging. The benefits are easy to miss, but they're snowballing into place, there's definitely an explosion of useless crap, but you have to look for the real things and you will come to find, that AI is giving us things we otherwise either might not have discovered or wouldn't have within our lifetimes.
What you thought your life would improve? Didn't you hear, wages are only increasing, why don't you invest some of that sweet cash into @JumpCrissCross' fund, it'll be alright. What were you going to do with healthcare anyway?
I think these IPOs are going to mint tens of thousands of new millionaires or something. That, in turn, will generate massive tax windfalls for all levels of government.
> other than the ability to produce more crap?
This is a big "other than." (And to be clear, the jury is still out on whether AI will let us produce more in the long run.)
There is going to be a well-deserved shitshow when these IPO proceeds start hitting real estate markets.
https://polymarket.com/event/anthropic-ipo-closing-market-ca...
I am skeptical that Anthropic and OpenAI can defend their dominance for long enough to make meaningful gaap accounted profits
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 :)
Keep in mind that inflation ran over 7% annualized in April [1].
[1] https://www.bls.gov/news.release/cpi.nr0.htm
The faster your cash loses value, the stronger your incentive to trade it for something else. That something else can be financial assets.
> It's not got loads to do with large-scale, institutional investments
For investors, particularly retail investors, the consumer price index is most relevant. But for whatever it's worth, producer prices are up over 16% in April (7% excluding "foods, energy, and trade services," which jumped over 50% annualized) [1].
To be clear, I'm floating a hypothesis here. I have seen no evidence linking inflation to demand for these companies' shares. (If anything, it should be the inverse.)
[1] https://www.bls.gov/news.release/ppi.nr0.htm
It's frustrating people who parrot it think they're smart by saying it to others with no basis and finally when it does happen they're like SEE SEE!?
> Until then, history teaches that we'll just keep going up and up
And this is the more important part. As long as you're <40 you SHOULD always buy SPY or VOO, even at the very top.
People have been saying the crash has been coming since 2022. If you believed this and acted on it, you would've missed 3-4 +10%/yr returns.
As Buffet says: You can't time the market; be in it.
S&P has not announced a methodology change yet.
https://www.spglobal.com/spdji/en/documents/indexnews/announ...
Post 08 crash, all sorts of conspiracy websites like Zero Hedge were popular saying how the world economy would keep crashing.
Edit: I should add the AI bubble can absolutely burst but there is no reason to believe these IPOs are the end of the ride. If I knew I would be…
while going with the tried&true makes some sense, I think we have to open our eyes to a different reality of our stock market… and this market concentration into few companies is going to get a lot worse…
A small number of companies have always driven most stock-market gains. Betting on size isn't fundamentally a bad bet. But it is a bet against value and the historical tendency for small companies to be higher risk and higher reward.
Even if all signs point to impending doom, at the end of the day if people are still buying, stocks will hold their value.
Is this not just "It's different this time" thinking? I remember it being used all the time during the dotcom boom
You mean 0DTE babies?
Stock prices don't have to crash. They can just stagnate while profits catch up and multiples compress.
Debt binges, on the other hand, tend to go bust with a bang. But after the recent private-credit scare, the AI build-out has been predominantly financed with stock. (I think.)
I believe that's been concentrated at the hyperscaler layer, and subsided when the aforementioned private-credit scare reared its head. (I haven't heard a big datacenter debt deal announced in a while. Though of course that doesn't mean they aren't being done.)
Is there is historical evidence for that? As someone who used to follow Jeremy Grantham a lot (he considered himself a "bubble historian"), IIRC every bubble he studied always mean reverted, and it usually (maybe always, can't remember) overshot on the downside during the correction.
This really depends on how we're defining these things. Let's call a stock-market bubble a period of elevated multiples. That can mean revert by prices decreasing while earnings stay constant or by prices staying constant and earnings rising. (Alternatively, both earnings and multiples can rise and fall.)
[1] https://www.federalreserve.gov/releases/z1/20260319/html/f22... line 16, 2023 to 2025
30% above the average. Households bought $1.6 trillion in Q3 of 2025, for example. (Foreigners bought a further $650 and $700 billion in Q3 and Q4, respectively.)
American capital markets are ridiculously deep.
Where did you get spending? That's net buying of stocks by non-financial Americans. It's the new money that has, on average, gone into the U.S. stock market from that section of investors every year. A third of it going into these new issuances doesn't need to break anything.
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.
I think what is happening is that OpenAI is racing to IPO before Anthropic because their growth isn't as impressive. If you are the weaker company, you should IPO first to lock up the cash.
What's the evidence for Anthropic stagnating?
So we’ve got a combination of signs that they’ve been inflating their revenue growth, and signs that their customers are losing their appetite for contributing to that revenue growth. I suppose it’s not a slam dunk, but it feels to me like as strong an indicator as one could hope for a private blitzscaler startup like this.
To be clear, S&P hasn't announced a decision on this yet.
S&P don't get a choice around whether they announce their methodology or not.
That said, the rule change at the NASDAQ 100 doesn't seem to have impacted pricing or allocation. I can't imagine that many people are that concerned about this. (I posted the public-comment request from S&P to HN [1]. The response was crickets.)
[1] https://news.ycombinator.com/item?id=48054324
Typically, you IPO when your private funding is drying up and/or some of your early lenders want to cash out.
It's worse for the new investors. (If it crashes.) It's great for the old investors. They got an opportunity to sell if they wanted. If they didn't, they still own their shares, except in a company that has that IPO cash sitting in its account.
Of course, some special souls are excluded from blackouts lol.
In the alternate timeline they would have held shares in a private company. They're still not really getting burned other than getting a tax bill.
I’m not necessarily expecting a crash any time soon. (But we average a major correction, what? every 8 years? So if you keep predicting one long enough you will eventually have been right all along.) But I do feel comfortable saying OpenAI and Anthropic are overpriced. For more or less the same reason Cisco was overpriced in the late ‘90s. It’s not that what they were making wasn’t valuable; it’s that we got out over our skis a bit over how much of it the world could actually manage to consume in the immediate future.
Groupon got to pretty much 100% penetration, still crashed and burned right after IPO. I think Zynga followed a similar trajectory.
> "There's no way you'll hurt yourself walking to the living room"
> "Read history: people always think everything is fine ... until it isn't."
So just buy the dip if it actually crashes.
History is also replete with people constantly predicting collapses that don't come. Timing the market is very hard with numbers, it's total nonsense if one is just going off vibes.
The good news is that these folks seem to be in possession of a vibe-rator.
Anthropic, SpaceX and OpenAI are not banks. (Also, we had the largest bank runs in American history three years ago. The ordinary American barely noticed.)
Yes. Equity investors. The ones who buy hundreds of billions to trillions of dollars of American stocks a quarter.
Cause if that's the case, I see no reason for a government bailout should things go south. Nobody's pension would be affected by some private investor losing money on a bad investment.
But if that's not the case, then someone somewhere along the chain is acting as a bank, subject to a vibe-driven run.
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
Also: All of those numbers you use to scare people are way, way off.
It's a liability because the U.S. has promised to pay it. We haven't committed to a level of military spending backed by our full faith and credit.
EDIT: Never mind! Apparently we can just cut social security payments.
In Flemming v. Nestor SCOTUS ruled that SS benefits are not guaranteed contractual rights but are instead statutory entitlements that Congress may modify or revoke.
The rest of your article is complete bogus and the economic equivalent of climate change denial.
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem."
No sympathy for people and institutions who make deals with the devil and expect the government to forever enslave taxpayers to honour those deals and pay back with interest.
Argentina is doing fine. The real constraint would be that defaulting on the debt would cause a credit crisis and bank collapses.
[0]: https://www.owenmcgrann.com/p/the-dead-economy-theory
Investors in these companies are going to be looking for revenue and pathway to profitability. I'm not sure anyone needs to see an impact on GDP to invest.
Yes. Even if this capital is just rotated out of the equity markets, it would be fine. The bond markets are orders of magnitude deeper.
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.
Only about a third of American stocks are held by passive capital [1]. Out of that, index funds are about 16%, and most of those in America reference the S&P 500, which has not yet announced whether it is changing its rules.
[1] https://alexchinco.com/double-what-you-think-it-is.pdf
Turns out it was a scam and shares fell on the first day. Soon after the entire bubble burst.
That said, I don't even see "huge demand" for the AI triocorns right now. Unlike in 2000, most people are skeptical.
Meanwhile, Anthropic is adding ~$10-$15b ARR every month.
I personally think there is massive demand. I think Anthropic will easily eclipse $2 trillion marketcap on first day of trading.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.
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.
The rollout relies on Starlink V3 sats, which can only be launched Starship, but Starship progress is going well and is already able to deploy satellites from orbit. SpaceX is capable of launching Starlink V3 on the current iteration of Starship, but they want more testing. We'll probably see Starlink V3 launching late this year or early next year.
I think the aim would be to generate at least $900bn of cash flow from those assets.
https://en.wikipedia.org/wiki/Bypass_Paywalls_Clean
The project has been going on for years, it moved to gitflic after being banned from github and gitlab.
Every time an article is AI critical or attracts too many AI skeptical comments, it is flagged. Is this process automated with openclaw by now?