The global share market is about to get three new entrants – SpaceX, OpenAI and Anthropic. Is this a sign that the market is reaching a top?
Incredibly, all three of these US tech titans are heavily involved in AI are planning to list in the near-term, with SpaceX planning to list first.
Initial public offerings (IPOs) are an exciting time because investors get the chance to invest in a business that they didn’t have access to before.
Each of SpaceX, OpenAI and Anthropic are looking to list in the US at valuations of more than $1 trillion.
Exciting futures
OpenAI and Anthropic are two of the global leaders of AI. Both of them have vast user bases and have seen significant revenue growth.
Anthropic’s Claude has built an important reputation in software coding, while Mythos could dramatically change the global cybersecurity picture.
Meanwhile, SpaceX is a world leader of (reusable) space rockets, transporting things to space, and satellites. SpaceX is also the owner of Grok AI and X (formerly called Twitter).
Should investors be cautious?
It can feel easy to invest in an area when there’s massive hype surrounding it.
But, there’s probably (at least) one reason why three AI-related businesses are looking to IPO right now – because investors are willing to pay a high price for them.
OpenAI and SpaceX are reportedly generating billions of dollars of net losses at the moment, though Anthropic is seemingly starting to reach positive operating profit.
The sellers are choosing when to list, so I definitely think it’s worthwhile being cautious about the valuations that are being touted.
Are they going to become more profitable as they grow? Or will the losses simply increase? Without extract more revenue from users, I’m not sure how likely it is that OpenAI and Grok AI can suddenly become more profitable.
Of the three, I think Anthropic would be the one I’d choose, even though it’s trading at a very high valuation too. Though, SpaceX’s space segment is very appealing too.
Final thoughts
There were eventually some big winners from the introduction of the internet, but I don’t think it’s likely that all of the major competitors – Google/Gemini, OpenAI, Anthropic and SpaceX will all be the winner of AI.
I’d prefer to focus on ASX growth shares where the outlook is clearer.
