The hard part is about to begin for the world’s biggest AI companies
AI giants prepare for public market debut
The hard part is about to begin – OpenAI, Anthropic, and SpaceX are set to face increased pressure from Wall Street as they prepare for their public market debuts. OpenAI, the creator of ChatGPT, has become the latest major AI company to file for an initial public offering (IPO), following Anthropic’s confidential filing last week. SpaceX, which houses Elon Musk’s AI venture xAI, is also scheduled to launch its stock offering on Friday. These public offerings aim to offer a detailed snapshot of the AI industry’s current state, with potential fundraising reaching into the hundreds of billions.
Market expectations for explosive growth
Investors are holding AI firms to high standards, demanding rapid expansion and transformative results. Even companies like Broadcom, which partnered with OpenAI and Anthropic, faced scrutiny despite reporting a 48% revenue surge in the second quarter and projecting semiconductor growth of 180% year-over-year. However, this didn’t prevent Broadcom’s shares from dropping over 13% last week, marking its worst performance since September 2024. The broader market mirrored this trend, with the Nasdaq experiencing three consecutive declines and the S&P 500 hitting its worst day since October. An ETF tracking memory chip stocks also fell 15% during the same period.
AI valuations and financial milestones
OpenAI and Anthropic have already reached valuations in the trillion-dollar range, but their public offerings will subject their business models to closer examination. OpenAI revealed it raised $122 billion in March, pushing its valuation to $852 billion. The company also reported $2 billion in monthly revenue, a significant jump from its previous quarterly earnings of $1 billion. ChatGPT, in May, became the fastest app to reach one billion users, achieving the milestone in three months—faster than Google Maps, TikTok, or YouTube, which took five to eight years. Anthropic, meanwhile, saw its valuation rise from $380 billion in February to $965 billion in May. The firm also disclosed a $47 billion run-rate revenue figure last month. For the first time, Anthropic overtook OpenAI in terms of business usage, according to fintech data from Ramp.
Public market scrutiny and future challenges
The IPOs may signal confidence in their paths to profitability, but they also mean greater accountability. Investors will likely question leaders like Sam Altman and Dario Amodei during earnings calls about upcoming products, model development delays, and strategies to convert AI innovations into revenue. For instance, OpenAI’s decision to shut down its video app Sora could draw sharper analysis. As financial advisor Nigel Green noted in an email to CNN:
“Expectations that seem manageable in private markets can become relentless under the glare of public ownership.”
Analysts like Stacy Rasgon, from Bernstein, have emphasized that public investors want constant progress:
“People want more. They always want more.”
While private investors can support long-term visions, public markets demand immediate results. This shift could redefine how AI firms are evaluated, with Wall Street closely watching for signs of sustained innovation and financial stability.
Looking ahead
OpenAI and Anthropic have not yet commented on their IPO timelines, but the numbers they’ve shared suggest a strong foundation. Still, analysts will likely probe deeper into their strategies, seeking evidence of endless growth potential. The upcoming public offerings may serve as a turning point, revealing whether these companies can maintain momentum in the high-stakes world of stock trading.
