Separately there’s a big battle to keep these folks out of the S&P index, because many funds (some of whom are required to buy index stocks) think they’re horribly over valued and will tank once floating.
Get your popcorn ready.
It's very unlikely, part of the reason why valuations are so high is because there is so much money, not just in the US, but globally, that is desperately seeking a place to park.
It's time for Google/Elon/Softbank/sovereign wealth funds, etc to cash out.
For you, it's time to tilt to bond and value.
While by "the end of May 2024, passive mutual funds and ETF assets" had "grown to nearly 60% of the equity fund market" (emphasis mine) [1], only about a third of American stocks are held by passive capital [2]. (Index funds are about 16%.)
> For you, it's time to tilt to bond and value
Or just buy the market and watch the show.
[1] https://www.americancentury.com/institutional-investors/insi...
Do you know anything about the state of bond markets?
The primary mechanism behind that is liquidity; Passively held assets decrease liquidity, and with there being a lot of passively held assets, liquidity isn't so great.
There are some warning signs that demand for AI companies, especially OpenAI, may not be so high as expected. https://www.bloomberg.com/news/articles/2026-04-01/openai-de... (Though OpenAI asserts that the demand is low because the seller isn't trusted)
On the other hand, it also seems like OpenAI and Anthropic are seeking to have a relatively "small" IPO by not selling too many shares. The market may absorb a few tens of billions. The big questio is how long it'll take for more of those companies to hit the market afterwards; They're burning through their money awfully quickly, and the earlier investors will want out as well.
Public markets are a different animal all together.
There are some concerned there won’t be enough willing to invest. That is a real risk given people smell a bubble about to pop.
The other ironic risk is if the float is too small it creates an artificially high valuation by letting a thin, momentum-driven market price 100% of the cap table, which then collapses when lockups expire, supply floods in, and the real market discovers the stock is worth far less than the marginal buyers said it was.
For example there’s talk that in that scenario SpaceX could end up with a 5T valuation… for a company that did only $18.5B in revenue last year. Thats beyond irrational even under the most aggressive growth scenarios.
I say this as a former public-equity derivatives guy, and now a private capital markets guy: I'm not seeing this seriously argued.
There is a real risk these companies are going out overvalued. But they're already overvalued in the private markets and arguably were even before near-term IPOs were on the horizon.
Markets can go risk off for any reason. If they do between now and these companies' IPOs, that spoils the party. But if they don't, there is no reason to suspect the risk capital driving into all manner of speculative equities, to say nothig of structured products and weird debt creatures, is suddenly going to hold the line at the darlings of the private markets.
> there’s talk that in that scenario SpaceX could end up with a 5T valuation
Where?
Liquid cash looking for a home is overwhelmingly white/blue collar retirement money. Billionaire money is almost always a totally undiversified portfolio of their own company. There are billions of people globally who save money and want it to grow, so they hand it over weekly to institutions that do asset management. It's these institutions that are seeking new investments, but the money isn't their own, it's largely everyday people's savings.
Now the risk is a massive stockmarket wide collapse. Over a third of the S&P 500 is AI heavy tech stocks. With how reliant Nvidia is on AI compute sales, there's a real risk that at least 7% of the market disappears instantly, and everything else will hurt massively as well.
You can't hedge against that. There's a good chance this will have contagion solely from the sheer size of a dotcom style crash in our current stock market. Pension funds would start selling off their unrelated assets to cover their losses.
Nevermind any secondary concerns; How balls deep private equity and private credit are in AI. How useless the current US administration is at both economic and monetary policy.
Not by shorting individual stocks, but you can by deleveraging in general. Stop using margins or options, hold a larger portion of your money outside the blast zone like account balance (hopefully with interest), bonds, international.
It’s a big risk and that’s why there’s a big fuss right now to keep these guys out of the index.
Tesla doesn't drag everyone else down.
>50% of the S&P 500 is involved with these AI providers. There will be a cascading effect.
What would stop a fund from just not including those stocks because of sampling?
Or waiting for time to settle, since even with full physical replication, they are not required to jump in and buy immediately after IPO.
The whole point of an index fund is I'm not paying someone to try to guess what stocks are going to under/over perform the S&P.
And when they are required to buy is not really a mystery either. they have very little discretion.
Money wouldn’t just be diverted from other US stocks though.
Foreign money has increasing buying power as USD weakens against certain currencies and the upside of these IPOs is certainly more attractive to global investors than parking money is lack luster real-estate or bond or cash alternatives.
TINA (to US stock market) and all that.
OpenAI seem to have the tech on par with Anthropic and world class con artist at the top and access to more compute. So when the tsunami of Chinese models and silicone materializes - Anthropic will be most vulnerable.
That held before SpaceX merged X, xAI and friends. Those are bleeding way more money than Starlink can recover.
that said, it definitely helped
Most of S&P 500 have shares in these anyway e.g. Microsoft and OpenAI. Not really making THAT much of a difference.
These companies are not publicly traded yet so they are not in these indices. Funds are fighting to keep them out so they’re not required to buy stocks they think will tank.
What are you basing this on?
SpaceX: up to $75B [1]
OpenAI: at least $60B [2]
Anthropic: more than $60B [3]
Together, that would be about $195B+ of IPO shares to buy.
For comparison, all U.S. IPOs together raised $44.0B in 2025 [4].
All IPOs in the world together raised $171.8B in 2025 [5].
So where should the money come from? Either from selling shares in other companies or from loaning money which would only make sense if the Fed brings back ZIRP.
[1] https://www.reuters.com/business/aerospace-defense/spacex-ta...
[2] https://www.reuters.com/business/openai-lays-groundwork-jugg...
[3] https://www.investing.com/news/stock-market-news/anthropic-c...
[4] https://www.renaissancecapital.com/review/2025USReview_Publi...
[5] https://www.ey.com/en_ie/newsroom/2026/01/global-ipo-market-...
What is expensive is model development and training, but again, that's nothing inherent to technology. It's just that Anthropic and other western vendors made a business decision to use cheap investors money to brute force a new model development and market grab instead of investing in cost optimizations for model training and inference like Chinese model developers and providers.
The question is if the MoE advances and compression (TurboQuant) makes common computers fast enough to run local models that are "Good Enough".
If anything breaks on my pc, it's going to be really rough.
My kids grow fast,a few years is a lot for them too.
And i have a bunch of games I want to play with my wife that require 2 computers sadly
Realistically Apple needs to put a few teams on it, and have built in support for running LLMs on OSX.
I assume if you integrate this on an OS level you might be able to pull off some additional tricks. So far most of the tools for running LLMs locally have been driven by volunteers or very small startups.
Microsoft could also do this, but they're too busy trying to upsell everyone. Microsoft wants to sell you on paying for each token.
Microsoft has spent a lot of time telling people to buy AI ready PCs.
I just don't think it's in their business model to offer on device LLM. They want you to subscribe to Copilot. Which encapsulates the entire enshitication of Windows. Microsoft demands more money. Subscribe to gamepass, subscribe to OneDrive!
In one example I know, a boring company that isn't a pure software company, the Github Copilot pricing change will make it around 15x as expensive as before. It's far from ideal when you cannot rely on pricing to stay somewhat stable.
Why would they?
They need to pay for the increasing costs and the high demand for running Claude and soon it will be reflected in their earnings releases. So every token cost counts and the subsidization era of tokens will eventually end.
As for subscription/token costs, even with increases they’re not even remotely covering costs. If people actually paid what it cost for these companies to even break even, nobody would be using these tools. They simply aren’t that consistently useful despite all the grand claims. They can be useful and in some areas they are very useful, but nobody is going to spend thousands of dollars a month to have something rewrite their emails regularly. And it’s not like these companies are trying to target one industry. They want to target everyone.
I like strawberries. And car washing. I hope they stay unaffected by Claude's whims.
The next step of the grift is offloading this into the stock market so that the investors get the exit event.
They will need a lot of bagholders this time around.
