The race to be the first frontier AI lab to reach public markets is on. Anthropic just confidentially filed for an initial public offering. OpenAI has reportedly been preparing its own draft. The valuations are eye-watering: Anthropic at $965 billion, OpenAI at $852 billion, each now looking to raise $60 billion. Add SpaceX’s launch-and-AI vehicle, pursuing a $1.75 trillion listing, and these debuts are the most concentrated burst of capital formation since the dot-com peak. Expect investors to go nuts.
But wait. Take a peek inside where the revenues for these AI darlings will come from. The labs racing each other are optimized for the top 15% of the global AI market, Anthropic even more so than OpenAI: enterprises with fast networks, deep talent, generous compute budgets — for now — and CEOs and their employees being encouraged to play with the models and find productivity gains. That is where copilots and frontier models deliver their most impressive demos. It is not where most of the money is. Hours after Anthropic filed its pre-IPO paperwork, OpenAI CEO Sam Altman admitted that corporate concern over excessive AI costs was “fair criticism.” Apart from the fact that corporate buyers are struggling to find the ROI, the cheaper open-source alternatives do just as well. Buyers are not yet seeing the returns the AI frontier lab sellers are pricing in.
