As AI companies race to go public, who will be along for the ride?

SpaceX went public this week The largest IPO evermaking CEO Elon Musk The world’s first trillionaire.

Despite its name, SpaceX has emphasized its potential Costly AI workAnd competitors OpenAI and Anthropic Their public market debut may soon follow. So in the last episode of TechCrunch’s Stocks PodcastKirsten Korosek, Sean O’Kane, and I discuss what looks like a hot summer for an IPO.

“We have SpaceX not only taking a big chunk of money from the public markets, but we’re also testing the boundaries of what a public company can be and how much it can be controlled by one person,” Sean said. “My eyes are really on what other tech companies are going public and how much they will try to imitate them.”

Kirsten also noted that there are other startups trying to “ride the SpaceX IPO wave,” for example by raising money for orbital data centers after SpaceX helped popularize the concept.

“So there’s a ripple effect happening across the market that I think is probably more interesting than just the headline, ‘SpaceX makes Elon a trillionaire,'” she said.

Keep reading for a preview of our conversation, which has been edited for length and clarity.

Anthony Ha: I want to zoom out a little bit from just the SpaceX IPO, because apart from Elon Musk, it’s the beginning of what could be (a series of) different IPOs for different AI companies. We talked about bringing Anthropic privately to go public, and now OpenAI has done the same. How excited are any of you about this?

Kirsten Korosek: I want to start by saying that I love Julie Port’s story, which I think sums it up very well. It’s a great title, so I’ll read it here:It’s not FAANG anymore, it’s MANGOS“FAANG is Facebook, which is now Meta; Amazon; Apple; Netflix; Google, now Alphabet.

Now that’s changed, we have Meta, Anthropic, NVIDIA, Google, OpenAI, and SpaceX. (We still have) huge tech companies, sure, but there’s a shift here, right? First, we have a bunch of AI labs there, and that’s very different. Netflix, a giant streaming service, launches from there. And so to me, this is an interesting shift in terms of public markets and the huge amount of money and capital available in public markets that is shifting away from consumer (and) social networks, and toward, specifically, AI labs and other more innovative deep technologies, like SpaceX.

So I think that’s the most interesting thing – aside from the fact that this summer is going to keep us all very busy as reporters, more so than any other summer in a while.

Sean O’Kane: You know, one time I wanted to be a lawyer, and one of the reasons I didn’t was because I hated the paperwork it would require. And here I am looking forward to reading hundreds of additional pages of SEC filings this summer – talk about beach reading.

It’s the moment we’ve been anticipating for a while. We’ve spent the last few years really wondering if the IPO market was going to quote a “back-up open” after so much panic over private markets, and cynicism about people getting into a series-like fundraising round (whatever that may be). This is a good stress test – I mean “good”, take that word as you will – a good stress test for the public markets in general.

Not only do we have SpaceX taking a big chunk of the money available in the public markets, but we’re also making a point of testing the boundaries of what a public company can be and how much it can be controlled by one person. I’m really focused on what other tech companies are going public and to what extent they will try to imitate them.

The thing I keep saying and thinking about with SpaceX is that they’re really trying to take some of the more extreme aspects of the original Google and Meta IPOs in the early 2000s and combine them with the “we’re going to lose money forever” line with Amazon. And I’m curious to what extent Anthropic and OpenAI will try to do the same thing. Will they remake themselves in SpaceX’s image? Or will they try to put themselves in a different light?

Anthony: One aspect that really drove home for me when I was reading about the OpenAI IPO was also how some of this was also a bit of a race in terms of timing. I think we can say with confidence at this point that SpaceX is first out of the gate, which may have some advantages and disadvantages. It’s also a bit of a different company because it considers itself an AI company, but obviously it has a bunch of other things going on as well.

But there’s a sense, at least according to some analysts, that OpenAI and Anthropic might want to outbid the other, because there’s only a finite amount of capital, and a finite amount of interest. At some point, some of these ratings have to start coming back down to earth, and so both may scramble to be first.

Kirsten: I mean, there’s a big race between Anthropic and OpenAI. You’re even seeing OpenAI talking about a price cut, and it’s sure to be a contender on the IPO calendar. But this is very short-term thinking. If they are smart, they should be more interested in playing long term here.

To me, what’s really interesting is that while Anthropic, OpenAI and SpaceX are preparing for these moments, there are a host of other companies raising money on the back of the success of companies like SpaceX, or entering into SPACs. Just today, for example, or as we’re recording this, a company called Quantum Space is doing a SPAC And absolutely trying to ride the SpaceX IPO wave.

We have a bunch of other startups that our reporter Tim Verholz has reported on that are clearly not going public, right? But if SpaceX succeeds in creating space-based data centers, it raises money on those capabilities and builds a business on those capabilities. So there’s a ripple effect happening across the market that I think is probably more interesting than just the headline,”SpaceX is making Elon a trillionaire.

Shawn: The generally accepted theory in Silicon Valley is that AI is reshaping the economy, but because of it is used. Artificial intelligence actually is actually Reshaping the economy – just because of the way people are trying to build it. We have everything I just described, and we have these other companies that are rushing into the public markets. And I think that’s a good point to think about: Will they ever regret rushing into the public markets?

But we also have companies like Ford and General Motors turning their unused battery production capacity into power supplies for data centers. Ford shares rose when it announced what was true A very modest energy storage companycompared to something like Tesla. And Tim De Chant had a great series of stories this week GM axlealso.

The economy has already been reshaped. Whether that’s durable, again, that’s the question, but it’s happening now.

Kirsten: That’s actually a really good point, because to me, I want to say that five, six, seven, eight years ago, there were all these headlines of “the next Tesla killer” and automakers and other companies are still chasing trying to recreate all of these diverse businesses, and specifically Elon Musk-based corporate strategies. They did not learn the lesson.

I wish I could get this across to all the auto CEOs out there: I understand that you have a lot of unused batteries and you want to focus on something else, but trying to model your business after Tesla or SpaceX and others, it doesn’t always work out. Maybe look elsewhere.

Shawn: So Ford shouldn’t go into satellite data centers. Is what you say?

Kirsten: No, they shouldn’t. But just watch. This will happen