Hello there,
The year of the mega initial public offering is upon us. Elon Musk’s SpaceX and Sam Altman’s OpenAI are firing the starting gun on going public and Anthropic could well follow suit.
The numbers are eye-popping. SpaceX is seeking a $1.75 trillion valuation which would make it the largest-ever stock market listing despite billions of dollars in losses and a structure that gives shareholders little say over what Musk does. SpaceX’s filing confirms a series of recent Reuters scoops about the IPO - in particular, that much of its outlook depends on SpaceX dominating technologies and markets that do not yet exist, from Mars missions to AI data centers in space.
But it will be hard for investors to exclude such a big company from their portfolios, even if much of the value is based around its celebrity CEO. And as my colleague Jeffrey Goldfarb points out, the IPO will further shrink the distinction between private and public companies: the ease with which companies can raise money privately means that outside investors have lost the upper hand and founders can demand more control. That’s not great for capital markets.
OpenAI’s last private funding round saw it valued at $852 billion and it could be valued at up to $1 trillion if it goes public. The ChatGPT maker is preparing to confidentially file for a U.S. initial public offering in the coming weeks, a source familiar with the matter told Reuters. The decision comes hot on the heels of Musk losing his legal battle against OpenAI and could mean CEO Altman beats rival Anthropic to the public markets.
In theory there should be plenty of investor love to go around for all these IPOs but Nvidia shows how hard it is to keep impressing. The world’s most valuable company beat estimates with its results and forecast on Wednesday but its shares slipped in late trading as investors bet it will face tougher competition. Many of Nvidia's biggest customers are pouring funds into developing their own custom chips to run models, posing a risk to Nvidia's long-held dominance over the chip industry.
Underscoring the competition in the semiconductor space, some Samsung chip workers will get bonuses of around $416,000 to avert a strike. Despite the big numbers, the deal is being hailed as a win for Samsung because the bonuses will largely be paid in stock and are less generous than awards at rival SK Hynix.
Money isn’t everything, though, right? Check out this week’s Econ World podcast, hosted by my colleague Ethan Plotkin. It takes a look at how the Dutch manage to work less than everyone else but still have healthy productivity levels, pensions and, crucially, Fridays free to bake. Watch it here.
