As AI companies race to go public, who else is in the race?

SpaceX went public this week with its biggest IPO ever, making CEO Elon Musk the world’s first trillionaire.

Despite its name, SpaceX is emphasizing the potential of its expensive AI business, and competitors OpenAI and Anthropic may soon have their own public market debuts. So on the latest episode of TechCrunch’s Equity Podcast, Kirsten Korosec, Sean O’Kane and I discussed what the summer of IPOs is looking like.

“We have SpaceX not only sucking up a huge chunk of the money available in the public markets,

but really pushing the limits of what a public company can be and how much it can be controlled by one person,” Shawn said. “I really have my eye on these other tech companies that will go public and how much they will try to emulate.”

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

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

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

Anthony Ha: I want to zoom out a bit from the SpaceX IPO, because beyond Elon Musk, this is the start of something that could be [series] Different IPOs for different AI companies. We’ve talked about Anthropic filing its confidential filing publicly, and now OpenAI has done the same. How excited are either of you about it?

Kirsten Korosec: I want to start off by saying that I love Julie Bort’s story, which I think sums it up very well. That’s a great headline, so I’ll read it here: “It’s not FAANG anymore, it’s MANGOS.” FAANG is Facebook, now meta; Amazon; Apple; Netflix; Google, Alphabet Now.

Now it’s shifted, and we’ve got Meta, Anthropic, Nvidia, Google, OpenAI, SpaceX. [We’ve still got] Big tech companies, sure, but there’s a change here, right? First of all, we have a lot of AI labs out there, and it’s very different. Netflix, a giant streaming service, is out there. And so to me, it’s an interesting change in terms of the public markets and the large amount of money and capital available in the public markets moving away from the consumer. [and] Social networks and, especially, toward AI labs and other, more innovative deeptech, like SpaceX.

So I think that’s the most interesting thing – aside from the fact that this summer is going to keep all of us very busy as journalists, probably more than any other summer in some time.

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

This is a moment we have been waiting for for a long time. We’ve spent the last few years really wondering whether the IPO market was going to quote “open back up” after so much panic about private markets, and scoffing about people getting access to their own chains. [whatever] Fundraising round. It’s a good stress test – I mean, “good”, take that word whatever you want – a good stress test of the public markets in general.

We have SpaceX not only sucking up a huge chunk of the money available in the public markets, but also really pushing the limits of what a public company can be and how much it can be controlled by a single person. I really have my eye on these other tech companies that will go public and how much they will try to emulate.

One thing I keep saying and thinking about SpaceX is that they’re really trying to take some of the most extreme aspects of Google and Meta’s original IPOs back in the early 2000s and combine it with Amazon with the “we’ll lose money forever” attitude. And I’m curious how much Anthropic and OpenAI will try to do this. Will they mold themselves in the image of SpaceX? Or will they try to see themselves from a different perspective?

Anthony: One aspect that really stuck out to me when I was reading about the OpenAI IPO was that there is somewhat of a race to this in terms of timing. I think at this point we can say with confidence, SpaceX is first out of the gate, which probably has some advantages and disadvantages. It’s also a slightly different company because it’s promoting itself as an AI company, but it obviously has a lot of other things going on as well.

But there is a sense that, at least according to some analysts, both OpenAI and Anthropic may want to go before the other, because there is only a limited amount of capital, a limited amount of interest. At some point some of these valuations will have to start coming back down to Earth, and so they may both be battling to be first.

Kirsten: I mean, there’s a lot of competition between Anthropic and OpenAI. You’re also seeing OpenAI talking about price reductions, and they’re definitely going to compete on the IPO calendar. But this is very short-term thinking. If they are smart, they should be more concerned about the long-term game here.

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

We have several other startups that our reporter Tim Ferholz has reported on Obviously – they’re not going to go public, right? But if SpaceX is successful with space data centers, they’re raising money from that capacity and they’re building a business on that capacity. So there’s a ripple effect throughout the market that I think is probably even more interesting than just the headline, “SpaceX makes Elon a trillionaire.”

Shawn: The generally accepted theory in Silicon Valley is that AI is remaking the economy, but because of Use. AI is really already Rebuilding the economy – that’s just how people are trying to rebuild it. We have everything you just described, we also have other companies that are participating in the public markets. And I think that’s a really good point to think about: Will they ever regret rushing into the public markets?

But we also have companies like Ford and General Motors that are using their unused battery manufacturing capacity to become energy providers for data centers. And Ford’s stock skyrocketed when it announced what is honestly a very modest-looking energy storage business compared to a company like Tesla. And Tim De Chant had a great series of stories this week about GM’s pivot.

The economy is already being rebuilt. Whether it’s sustainable is still the question, but it’s happening now.

Kirsten: It’s actually a great thing, because I want to say that five, six, seven, eight years ago, there were all these headlines of the “next Tesla killer” and these automakers and other companies are still trying to reinvent the strategies of all these different businesses and particularly Elon Musk-based businesses. He has not learned his lesson.

I wish I could tell this to all automaker CEOs: I get that you have a lot of unused batteries and want to move on to something else, but trying to model your business after Tesla or SpaceX and others, that doesn’t always work. Maybe look elsewhere.

Shawn: So Ford shouldn’t go into space data centers. Is that what you are saying?

Kirsten: No, they should not do this. But just look. This is going to happen.