As AI companies race to go public, who else is along for the ride?

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

Despite its name, SpaceX has highlighted the potential of its costly AI activities, and competitors OpenAI and Anthropic could soon follow suit with their own public market debuts. So on the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane and I discussed what seems like a hot IPO summer.

“We have SpaceX not only just sucking up a lot of the money available in the public markets, but really pushing the boundaries of what a publicly traded company can be and how much it can be controlled by a single person,” Sean said. “My eye is really on these other tech companies that are going to go public and how much they’re going to try to emulate.”

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

“So there’s a ripple effect going on across 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 little bit on just the SpaceX IPO, because aside from the Elon Musk of it all, this is the start of what will be a [series] of various IPOs for various AI companies. We talked about Anthropic’s confidential submission being made public, and now OpenAI has done the same. How excited are either of you about this?

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

Now it has shifted and we have Meta, Anthropic, NVIDIA, Google, OpenAI, SpaceX. [We’ve still got] huge tech companies, sure, but there’s a shift here, right? First of all, we have a number of AI labs there, which is very different. Netflix is ​​launched from there, a gigantic streaming service. And so, to me, it’s an interesting shift in terms of public markets and the enormous amount of money and capital available in the public markets, shifting away from the consumer market. [and] social networks and in particular to AI labs and other more innovative deep tech, such as SpaceX.

So I think that’s the most interesting thing – other than the fact that this summer is going to keep us all very busy as reporters, more so than probably any other summer in a while.

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

It’s a moment we’ve been looking forward to for a while. We’ve really wondered in recent years whether the IPO market would go quote-unquote “open backup” after much consternation about private markets and ridicule about people hitting their like streak. [whatever] fundraising round. This is a good stress test – I mean ‘good’, take that word as you will – a good stress test of the public markets in general.

Not only is SpaceX only sucking up a large portion of the money available in the public markets, but it is also placing an emphasis on testing the limits of what a publicly traded company can be and how much it can be controlled by a single person. My eye is really on these other tech companies that will go public and how much they will try to emulate.

Something I keep saying and thinking about with SpaceX is that they’re really trying to mash up some of the most extreme aspects of the original Google and Meta IPOs of the early 2000s with the statement, “We’ll lose money forever” with Amazon. And I’m curious to what extent Anthropic and OpenAI will try to do the same. Will they remake themselves in SpaceX’s image? Or will they try to portray themselves in a different light?

Anthony: Also, one aspect that really came to mind when I read about the OpenAI IPO is the extent to which some of this is also a bit of a race in terms of timing. I think at this point we can confidently say that SpaceX is first out of the gate, which probably has some pros and cons. It’s also a bit of a different company because it bills itself as an AI company, but there’s obviously a lot of other stuff going on.

But in a sense, OpenAI and Anthropic, at least according to some analysts, would both want to go ahead of the other, because there is only a finite amount of capital, a finite amount of interest. At some point, some of these ratings have to come back down to earth, and so they can both compete to be first.

Kirsten: I mean, there’s a big race between Anthropic and OpenAI. You even see OpenAI talking about lowering prices, and they will certainly compete on the IPO calendar. But that is very short-term thinking. If they’re smart, they should be a lot more concerned about the long-term game here.

What’s really interesting to me is that while Anthropic, OpenAI, and SpaceX are all preparing for these moments, there are a host of other companies raising money off the success of companies like SpaceX, or setting up SPACs. For example, today, or as we’re recording this, a company called Quantum Space is doing a SPAC and definitely trying to ride the SpaceX IPO wave.

We have a lot of other startups that our reporter Tim Ferholz has reported on that are clearly not going public, right? But if SpaceX is successful with space data centers, they’re monetizing that potential and building businesses on that potential. So there’s a ripple effect happening across the market that I think is probably even more interesting than just the headline: “SpaceX Makes Elon a Trillionaire.”

Sean: The generally accepted theory in Silicon Valley is that AI is reshaping the economy, but for the sake of the economy usage. AI actually is al reshaping the economy – just because of the way people are trying to build it. We have everything you just described, we have these other companies rushing into the public markets. And I think this is a really good point to think about: will they ever regret rushing into the public markets?

But we even have companies like Ford and General Motors using their unused battery-making capacity as energy suppliers for data centers. And Ford’s stock skyrocketed when the company announced what is, frankly, a pretty modest energy storage company compared to something like Tesla. And Tim De Chant also had a great series of stories this week about the GM pivot.

The economy is already being remade. Whether that is sustainable is the question, but it is happening now.

Kirsten: That’s actually a really good point, because to me, I want to say that five, six, seven, eight years ago there were all these headlines about “the next Tesla killer,” and these automakers and other companies are still trying to recreate all these different companies, and specifically the strategies of Elon Musk-based companies. They haven’t learned their lesson.

I wish I could communicate this to all the CEOs of car manufacturers: I understand you have a lot of unused batteries and you want to do something different, but if you try to model your company after Tesla or SpaceX and others, it doesn’t always work. Maybe look elsewhere.

Sean: So Ford is not allowed to enter space data centers. Is what you say?

Kirsten: No, they shouldn’t. But just look. This is going to happen.