Welcome to the era of the big three.
We’re not talking about rappers here (although, according to Kendrick Lamar, that’s “just the big me”), we’re talking about artificial intelligence companies: Anthropic, SpaceX, and OpenAI.
These three leading AI companies are expected to go public this year. Elon Musk’s SpaceX, which recently acquired another Musk company, xAi, is on track to open to investors later this month. Anthropic, the company behind the Claude chatbot, just confidentially filed with the State Securities and Exchange Commission for its own initial public offering. Reports say OpenAI could also go public in September. (Disclosure: Vox Media is one of several publishers that have signed partnership agreements with OpenAI. Our reporting remains editorially independent.)
SpaceX’s IPO, when it happens, could be the largest in history and make Musk the world’s first billionaire. With Anthropic and OpenAI, the combined value of AI IPOs could total more than $3 trillion.
But it’s not as simple as going public and making money. “There is a race between SpaceX, OpenAI and Anthropic,” said Liz Lopatto, senior writer at The Verge. “There’s a fear that if you don’t go public at the right time or don’t go public first, investors aren’t going to wait for you.”
To understand why some of the world’s richest men, running some of the world’s richest companies, are now courting the public’s money, Today, explained Co-host Sean Rameswaram spoke with Lopatto.
She’s been deeply immersed in SpaceX’s public filings and has been covering the courtroom drama between Musk and OpenAI’s Sam Altman. His latest article for the Verge is titled “SpaceX’s IPO is great for Elon Musk and terrible for you.”
Sean and Lopatto talk about what each of the companies hopes to get from the public, why this moment could be like the Internet 1.0 dotcom bubble, and whether these companies chasing shareholder profits will be good for us.
Below is an excerpt from their conversation, edited for length and clarity. There’s a lot more in the full podcast, so give it a listen Today, explained wherever you get podcasts, including Apple Podcasts, Pandora, and Spotify.
Because [these companies] Do you need to make it public right now?
Whoever goes public first will get better investors or will have an easier time convincing them. This is fueling this rush to the market. So that’s one thing.
But the second thing is that AI is extremely expensive. And I think that’s something that people often forget because right now we’re in the early days of Uber, where you use this very expensive tool for free and then they try to hook you into paying real prices later.
To get the money you need for computing, to build all these data centers, to do all the things you need to do to have these frontier models, it’s an incredibly capital-intensive business. One way to raise capital is to go public.
Anthropic has had better discipline than the other companies in terms of being like real adults. In fact, they may tell us a little less before it happens than we’ve heard from, say, SpaceX.
Tell me more about being like adults when it comes to OPI, which seems like a very adult thing to do.
There are many things that come into play with an IPO. And basically what you’re doing is establishing what your company is, what the vision of the company is, how you plan to make money and what you’re going to do with all the money that you’re raising in the IPO. And for SpaceX, there’s a lot of nonsense about Mars that doesn’t really ring true to me. There’s nothing about the biological risks of going to Mars, for example, or the risk factors that, if that were real, you’d see.
One of the things that has been notable is that both Anthropic and OpenAI seem to have better businesses, based on what we know. In fact, Anthropic is about to turn a profit. Anthropic in particular did not create any images with its AI. He stuck to the text and focused specifically on programming. It’s not a sexy business, it’s enterprise software. But you don’t have to be sexy to make money.
Just looking at the difference between the flash that we’re seeing, like spreading the light of human consciousness among the stars and actually making money, which is the goal of a company. I would say that Anthropic seems to be run by adults by comparison. And then I would put OpenAI somewhere in the middle.
Because? What is Open AI doing that isn’t very adult behavior?
OpenAI as a business is really spread out. They created and closed Sora, which were AI-generated videos. They have these AI image generators that have created a whole new level of headaches for them. They are involved in a series of lawsuits.
Sam Altman, the CEO, was effectively running it as a startup made up of small startups inside and said, “Well, we’ll see which one wins.” And maybe that’s not the best way to run a business. It’s a good way to manage a portfolio, but a company is not a portfolio.
Liz, you are very connected to this world of Silicon Valley and you were at the trial between Altman and Musk. It seems that all of these companies are being talked about at the same time, although two of them are very specifically artificial intelligence companies and one of them wants to colonize Mars. Why is that? Is it just because they could all go public soon?
I think that’s part of it. I also think there’s been this investment thesis that cutting-edge AI models are going to be effectively booming on the scale of Internet 1.0, if you remember 1999.
This is the moment we’re going to find out who is Google, who is Amazon, and who is Pets.com, right? And I think that’s why people talk about them this way, because it’s not just these three companies that are AI companies. Obviously Google has an AI arm that is very good. But then there are companies like Databricks, which you may not have heard of.
Yes. This is a perfectly good company. He has a business. But it’s not in that conversation because I don’t think people expect it to be one of the giants in the way that they see these three as the potential giants of this generation of technology.
This reminds me that when social media companies went public, they started prioritizing things like shareholder profits over safety. I think Facebook (Meta) is probably the most prominent example of this.
Do we want the majority of guys who still hold our future in their hands to be beholden to market forces and profits above all else?
You could say that they already are.
This is one of the arguments that’s been made about OpenAI: that the reason they’ve had some of these security-related issues has been because they’re motivated by chasing the market and trying to raise money. Because unlike social media, this is a capital-intensive business.
You need to show something to investors. You have to prove yourself in a way that you didn’t necessarily have to do on social media in the first place. So I think that’s part of it. But I think making it public potentially makes things worse. The chatbot will try to keep you engaged. He will give you an answer and then ask you a tag question. And that’s an interaction tool that keeps you engaged with the AI.
That’s also seen with some of the sycophantic behavior that you see with these AIs, where they say, “Wow, that’s a really smart question. Wow, you’re so brilliant.”
And is that really good for us? I don’t think it is. But it keeps people engaged and it keeps people engaged with AI, and if you need to show user numbers or show metrics to investors, those are the ones you need to show.
It seems almost silly to ask whether being a publicly traded company could make these companies more responsible or even safer. But, again, if you think about Anthropic and their whole fight with the Pentagon, without going public, they said, you know, you guys are crossing the red line and we have to reevaluate our relationship.
Do you think something about going public after the IPO might make a company like Anthropic or OpenAI a little more conservative in their developments and technology?
To the extent that you can say, “Hey, this company misled me as a shareholder because they told me there were these security practices that weren’t actually in play and then they took them to court,” that’s something you can do, of course. Unless you’re talking about SpaceX, which has a governance structure that effectively prohibits shareholder lawsuits unless you have a specific percentage stake.
So, not SpaceX, but maybe Anthropic, maybe OpenAI has this additional measure of accountability where shareholder lawsuits can potentially move the needle.
But chances are we’ll start seeing a lot more ads.
I think that’s correct. I think you’re also seeing prices increase for enterprise products, and maybe all other products as well.