The season of AI's IPOs begins this week with the SpaceX issue on Thursday to be followed up by Anthropic and OpenAI later in the year. The US will end a long IPO winter with trillion-dollar listings that raise questions over valuations. In a scenario of rising interest rates, AI companies need to access cheap public equity in order to sustain their cash burn. It feeds concerns about the AI bubble that has grown on too much venture capital chasing a technology yet to prove itself.
SpaceX was valued at $800 bn before it merged with xAI, when the needle moved up to $1.25 tn. After the IPO, SpaceX is targeting a market capitalisation of $1.75 tn. Anthropic's value climbed from $61.5 bn to $965 bn in just over a year. OpenAI is worth $825 bn, up from $29 bn in 2023, $157 bn in 2024, and $500 bn in 2025. Sustaining this valuation trajectory may become difficult once the companies cross the PE frontier. In each case, the listing price-earning multiple is set to be several times that of Nvidia, the most profitable AI company around.
