AI Giants' IPOs Poised to Surpass 25 Years of Tech Exits

We've discussed the anticipated IPO summer, but with SpaceX's recent public market launch and upcoming IPOs from Anthropic and possibly OpenAI, it's easy to overlook the magnitude of what's happening. A recent NCVA-Pitchbook Venture Monitor report provided a useful reminder. Not surprisingly, private markets are pouring money into AI, but one figure stood out.

Considering the pending OpenAI and Anthropic IPOs, the report states: "Along with the SpaceX IPO, these exits will generate more value than all U.S. VC-backed exits since 2000." This claim is striking, and the numbers support it. SpaceX has gone public at a $1.77 trillion valuation, and with both Anthropic and OpenAI pushing into the trillions, the trio may reach a combined valuation over $4 trillion.

In comparison, the U.S. Securities and Exchange Commission reported $70 billion in US-based IPO proceeds last year. The language used in the report includes some caveats.

It doesn't account for non-U.S. companies like Alibaba, and it's measuring "value created" rather than strictly liquid cash. Many significant tech developments occurred at companies that had already gone public, such as the iPhone, Android, YouTube, and Instagram, so they wouldn't be captured in the IPO figures.

Still, the past 25 years have been eventful. This period saw IPOs from Google (2004), Tesla (2010), and Meta (2012), now among the world's most valuable companies. During the same period, LinkedIn, Slack, and WhatsApp were acquired for over $20 billion.

Uber's $84 billion IPO in 2019 seemed substantial, but it's less than 5% of SpaceX's valuation. One factor is that companies are staying private longer. Today's Google would likely delay its IPO and go public at a higher valuation.

Another factor is the capital-intensive nature of AI training, which has driven labs to intense fundraising and inflated valuations. The sheer scale of these public offerings is unprecedented and is already pushing the financial infrastructure to its limit. Why this matters: The potential IPOs from Anthropic, OpenAI, and SpaceX have far-reaching implications for the tech industry.

If these companies can generate more value than all US VC-backed exits since 2000, it could signal a new era of massive public offerings. This shift could impact the way companies approach fundraising, growth, and going public. Developers and businesses may need to adapt to a new landscape where AI giants are driving valuations and IPOs.

Consumers may benefit from increased innovation, but concerns about market concentration and competition may arise. As the financial infrastructure is pushed to its limit, regulators and investors will be watching closely to ensure a smooth process. The success of these IPOs could also pave the way for other AI companies to follow suit, leading to a surge in new public listings and further changing the tech industry's dynamics.