SpaceX, OpenAI and Anthropic are already public companies & more related News Here

This summer, a ridiculous company plans to go public at a ridiculous price. If SpaceX, the rocket maker, internet provider, artificial-intelligence lab and social network controlled by Elon Musk, raises anything close to $75 billion at a valuation around $2 trillion, its initial public offering (IPO) would be the financial equivalent of landing on Mars.

Already, SpaceX’s massive leverage is troubling the public markets. Nasdaq changed rules on how quickly companies are included in its index to attract Mr Musk to the exchange. Furthermore, some listed companies have become public proxies for its private stocks. The most obvious is Tesla. Although it owns only one piece of SpaceX, the pair share hardware, software and Mr Musk himself. Some analysts envision the eventual creation of a consolidated Musk Inc., an industrial Frankenstein’s monster with the body of Optimus, Tesla’s robot, and the brain of Grok, the chatbot developed by XAI, which SpaceX incorporated in February. Others are worried that SpaceX’s listing could weaken Tesla: After all, why would retail investors who are fans of Mr. Musk put their money into a car maker whose sales are valued at 14 times the price, when they can buy a cosmic creator of super-intelligence at 100 times?

Tesla isn’t the only big company whose value is tied to SpaceX. Google’s parent company Alphabet owned 6% of it at the end of last year. The investment, made in 2015, forms part of the $107bn of private shares on its balance-sheet, whose rising valuations contributed almost half of Alphabet’s pre-tax profit in the first quarter. In March EchoStar, a loss-making telecom company, joined the S&P 500 index for no reason other than the $11 billion of stock in SpaceX it would get in exchange for selling its spectrum licenses. “We have placed our bet, and that is with SpaceX,” said the EchoStar founder after betting on himself for nearly five decades.

Buying SpaceX, like buying Bitcoin, could turn even the smallest company into a speculative vehicle. Consider Xamax, a US-listed furniture business with annual sales of just $17 million. Until recently it faced the threat of its shares being delisted because their prices were too low. However, since September, it has aggressively bought into special-purpose vehicles (SPVs), which it says hold shares in SpaceX. It now has a market cap of an inexplicable $380 million. Jet.ai, a small aviation company whose main product appears to be a flight-booking app called “CharterGPT,” similarly attempted to capture the market’s attention, though still short the $5 million shares of SpaceX the company says it owns through an SPV.

SpaceX stock lurks like Forrest Gump in the background of every big financial story these days. Markets are skyrocketing in South Korea. The share price of Mirae, one of its biggest brokers, has almost tripled this year – but that’s largely due to its small investment in Mr Musk’s empire. SpaceX has also played a role in the private-credit panic. A large portion of its shares, oddly enough, is held by one of Blue Owl’s distressed lending funds.

American finance operates under the same principle as American cooking: He who wants the average must have the abundance. Accordingly, a number of ultra-processed SpaceX-flavored products have been created for retail investors. Notably, the largest holding in an exchange-traded fund (ETF) is an SPV that holds SpaceX stock. In the prediction markets anyone can bet on the date of SpaceX’s IPO, how much it will cost, whether the bank will bank on the deal and whether Mr Musk will ever reach Mars.

There are almost as many ways to bet on the fortunes of OpenAI and Anthropic, two AI labs also planning to list their shares this year. These private companies are so important that their fortunes also shine through the public markets. This week’s report that OpenAI has missed some financial targets has sent the share price of Japanese conglomerate SoftBank, which has invested large sums of money in the model-maker, down by about 10%. Meanwhile, Zoom, a video-conferencing company, has escaped the recent carnage of software stocks because of Anthropic’s coding capabilities — because it’s a part of Anthropic.

When executives from SpaceX, OpenAI and Anthropic visit the world’s financial capitals to drum up interest ahead of their listings, they will unusually attract investors who are already well familiar with their businesses. Once companies have amassed a mountain of capital, their owners are unlikely to be bothered too much by such shareholders. Mr Musk will remain in control of SpaceX; OpenAI, run by Sam Altman, and Anthropic, run by Dario Amodei, are unlikely to embrace shareholder democracy. The governance of these companies may remain more or less the same, but their listing will change the market. The brilliant seven will become the brilliant ten. For the first time, investors will digest regular, audited financial information about a technology whose promise seems to be taking over the entire market.

crazy

American capitalism is undergoing a great experiment. The value of its companies is becoming far more concentrated, even as the ways to invest in them are expanding. The result is that there appears to be an unlimited number of bets on a small range of huge companies. The strange shadow market for shares in SpaceX is an extreme example of the trend, but this pattern is also visible on the public stock market it will soon join. The number of listed US companies has been declining almost continuously since the late 1990s, although their combined profits have increased. At the same time, the number of investment vehicles has exploded: there are now more ETFs than listed companies. Markets are built around less and less well-known executives—and more and more around unknown gamblers.