As AI companies race to go public, who else will get in on the action?

SpaceX went public this week in the largest IPO in history, making CEO Elon Musk the world’s first billionaire.

Despite its name, SpaceX is touting the potential for an expensive AI business, with competitors OpenAI and Anthropic also likely to make their own public market debuts soon. So on the latest episode of TechCrunch’s stocks podcast, Kirsten Korosec, Sean O’Kane and I discuss the hot IPO summer.

“We’re letting SpaceX not only suck up a huge amount of the money that’s available in the public markets, but we’re really testing the limits of what a public company can be and how much control it can have by one person,” Sean said. “What I’m looking at is what other technology companies are going to go public and how much they’re going to try to imitate it.”

Kirsten also pointed out that after SpaceX helped popularize the concept, there are other startups looking to “ride the SpaceX IPO wave,” for example by raising money for an orbital data center.

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

Continue reading for a preview of the conversation, edited for length and clarity.

Anthony Ha: I want to zoom out a little bit from just the SpaceX IPO. Because beyond Elon Musk, this is the beginning of what could be a series of different IPOs for different AI companies. We talked about Anthropic’s secret filing to go public, and now OpenAI has done the same. How excited are you guys about this?

Kirsten Kolosek: I want to start by saying that I love Julie Bolt’s story. I think this sums up the story very well. It’s a great headline, so let’s read it here: “We’re not FAANG anymore, we’re MANGOS.” FAANG is Facebook and now it’s Meta. Amazon; Apple; Netflix; Google; now Alphabet.

Now that has changed and we have Meta, Anthropic, NVIDIA, Google, OpenAI, and SpaceX. Sure (we still have) big tech companies, but things are changing here, right? First of all, we have a lot of AI labs out there, and it’s very different. Streaming giant Netflix will be kicked out of there. So, to me, this is an interesting shift in that the public markets and the huge amount of money and capital that is available in the public markets is moving away from consumer (and) social networks and into other more innovative deep technologies like AI Labs and SpaceX specifically.

So I think that’s the most interesting thing. Aside from the fact that we’re all going to be extremely busy as reporters this summer, probably more than any summer in a while.

Sean O’Kane: You know, back in the day, I wanted to be a lawyer, but one of the reasons I didn’t was because I didn’t like the paperwork that came with it. And I look forward to reading hundreds more pages of SEC filings this summer. It’s about a story I read on the beach.

It’s a moment we’ve been waiting for for a while. We’ve been wondering for the last few years whether the IPO market is really going to, quote unquote, “reopen” after a lot of confusion about the private markets and ridicule for people who have reached series-like funding rounds (of whatever kind). This is a good stress test. In other words, take the word “good” however you like. It’s a good stress test for public markets in general.

We’re having SpaceX not only siphon off a huge amount of the funds available on the public market, but really test the limits of what a public company can be and how much it can be controlled by one person. My focus will be on other technology companies that go public and how much they try to imitate.

What I always say and think about SpaceX is that they’re really taking some of the most extreme aspects of Google and Meta’s first IPOs back in the early 2000s and trying to mash them up with Amazon’s “you’re going to lose money forever” thing. And I’m interested to see how much Anthropic and OpenAI try to do the same thing. Will they remake it in SpaceX’s image? Or will they try to see themselves from a different perspective?

Anthony: One of the things that really hit home for me reading about OpenAI’s IPO is that this is a bit of a race in terms of timing. At this point, I think we can confidently say that SpaceX is first out of the gate, which probably has some advantages and disadvantages. The company also advertises itself as an AI company, so it’s a slightly different company, but it clearly does a lot more.

But there’s a sense, at least according to some analysts, that both OpenAI and Anthropic may want to get ahead of the other. Because there is only finite capital and finite interest. At some point, some of these valuations will have to start coming back to Earth, so both could vie for first place.

Kirsten: So there’s a lot of competition between Anthropic and OpenAI. We’ve also seen OpenAI talking about a price cut, and it’s sure to be a contender on the IPO calendar. But that’s a very short-term idea. If they’re smart, they should be more concerned about the long-term play here.

What’s really interesting to me is that while Anthropic, OpenAI, and SpaceX are all preparing for a moment like this, there are many other companies that are raising money or entering SPACs on the back of 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 they’re definitely trying to ride the SpaceX IPO wave.

There are a lot of other startups that our reporter Tim Verholz has reported on that are obviously not going to go public, right? But if SpaceX succeeds in its space data centers, it will be financing and building a business on that potential. So I think the ripple effects that are happening across the market are probably even more interesting than just the “SpaceX makes Elon a trillionaire” headline.

Sean: The generally accepted theory in Silicon Valley is that AI is reshaping the economy because of its use. In fact, AI is already reshaping the economy. It’s simply because people are trying to build an economy. We have everything you just described and other companies rushing to the public market. And I think this is a very good point to think about. Will they regret rushing to the public market?

But companies like Ford and General Motors are also pivoting to unused battery generation capacity as energy providers for data centers. And when Ford announced an energy storage business that honestly looks pretty modest compared to the likes of Tesla, its stock price soared. And this week, Tim De Chant also gave us a really great series of stories about GM’s pivot.

The economy is already being reshaped. Whether it’s durable or not, that’s also the question, but that’s what’s happening now.

Kirsten: That’s actually a really good point. Because, for me, the point is, five, six, seven, eight years ago, there were all these headlines that said, “The next Tesla killer,” and these automakers and other companies are still chasing after trying to reinvent all the strategies of these different businesses, especially the Elon Musk-based businesses. They haven’t learned their lesson.

I wish I could say this to all the CEOs of automakers, but I understand that you have a lot of unused batteries and want to pivot to something else, but trying to model your business after Tesla or SpaceX or something like that doesn’t necessarily work. Perhaps look elsewhere.

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

Kirsten: No, you shouldn’t. But just look. This is how it will be.