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

SpaceX launched this week in its biggest-ever IPO, making CEO Elon Musk the world’s first billionaire.

Despite its name, SpaceX has emphasized the potential of the expensive AI business, and competitors OpenAI and Anthropic may soon follow 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 looks like a hot IPO summer.

“We have SpaceX not only absorbing a huge chunk of the money that’s available in the public markets, but really testing the limits of what a public 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 going public and how many they’re going to try to emulate.”

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

“So there’s a ripple effect happening across the market that I think is probably even more interesting than the headline, ‘SpaceX makes Elon a trillionaire,'” he said.

Read on for a preview of our conversation, edited for length and clarity.

Anthony Ha: I want to zoom out from SpaceX’s IPO alone, because beyond Elon Musk of all, it’s the beginning of what could be [series] of different IPOs for different AI companies. We talked about Anthropic’s confidential filing to go public, and now OpenAI has done the same. How excited are either of you for this?

Kirsten Korosec: I want to start by saying that I love Julie Bort’s story, which I think sums it up very nicely. It’s a great title, so I’ll 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 changed and we have Meta, Anthropic, NVIDIA, Google, OpenAI, SpaceX. [We’ve still got] Massive tech companies, sure, but there’s a shift here, right? First of all, we have a bunch of AI labs there, and this one is very different. Netflix starts there, a giant streaming service. And so, to me, it’s an interesting shift in terms of public markets, and the huge amount of money and capital that goes into public markets is being moved away from the consumer [and] social networks and to, in particular, artificial intelligence labs and other more innovative deep-tech technologies, such as SpaceX.

So I think that’s the most interesting thing — aside from the fact that this summer is going to keep us all busy as journalists, more so than any other summer in a while.

Sean O’Kane: You know, once upon a time I wanted to be a lawyer and one of the reasons I didn’t was because I hated the red tape that was going to be involved. And here, I look forward to reading hundreds more pages of SEC filings this summer — talk about a beach read.

It’s a moment we’ve been waiting for for a while. We’ve spent the last few years really wondering if the IPO market was going to declare “open backup” after a lot of concern about private markets and banter about people hitting the ranges they like [whatever] fundraising round. This is a good stress test — I mean, “good,” take the word as you will — a good stress test for public markets in general.

We have SpaceX not only absorbing a huge chunk of the money available in the public markets, but also really testing the limits of what a public 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 many they will try to emulate.

Something I keep saying and thinking with SpaceX is that they’re really trying to take some of the more extreme aspects of the original Google and Meta IPOs in the early 2000s and combine it with this “We’re going to lose money forever” thing with Amazon. And I’m curious how hard Anthropic and OpenAI will try to do the same. Will they remake themselves in SpaceX’s image? Or will they try to put themselves in a different light?

Anthony: One aspect that really drove home as I read about the OpenAI IPO is also the extent to which some of it is also a bit of a challenge in terms of timing. I think it’s safe to say at this point, 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’s billed as an AI company, but it obviously has a bunch of other things going on as well.

But there’s a sense in which, at least according to some analysts, OpenAI and Anthropic might both want to get ahead of the other because there’s only a finite amount of capital, a finite amount of interest. At some point some of those valuations have to start coming back down to Earth, and so they may both be trying to be first.

Kirsten: I mean, there’s a lot of competition between Anthropic and OpenAI. You even see OpenAI talking about price cuts and they will definitely compete on the IPO calendar. But that’s too short-term thinking. If they’re smart, they should be much more concerned about the long-term game here.

To me, what’s really interesting is that while Anthropic, OpenAI, and SpaceX are preparing for these moments, there are a lot of other companies out there that are raising money on the back of the success of companies like SpaceX or going to SPACs. Just today, for example, or as we write this, a company called Quantum Space is doing a SPAC and is absolutely trying to ride this SpaceX IPO wave.

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

Sean: The commonly held theory in Silicon Valley is that AI is reshaping the economy, but because of it use. AI is in reality already rebuilding the economy — precisely because of the way people are trying to build it. We have everything you just described, we have these other companies rushing to the public markets. And I think that’s a really good point to think about: Will they ever regret rushing into public markets?

But we even have companies like Ford and General Motors turning their unused battery-making capacity to be power providers for data centers. And Ford’s stock soared when it announced a frankly pretty modest energy storage business, compared to something like Tesla. And Tim De Chant had a really great series of stories this week about the GM pivot, too.

The economy has already been rebuilt. Whether that’s durable, again, that’s the question, but it’s happening right now.

Kirsten: That’s actually a very good point, because for me, I want to say five, six, seven, eight years ago, there were all these headlines of the ‘next Tesla killer’ and these automakers and other companies are still chasing around trying to recreate all these different businesses, specifically the business strategies based on Elon Musk. They haven’t learned their lesson.

I wish I could share this with all the auto CEOs out there: I get that you have a lot of unused batteries and want to turn to something else, but trying to model your business after Tesla or SpaceX and others doesn’t always work. Maybe look elsewhere.

Sean: So Ford should not get into space data centers. Is that what you say?

Kirsten: No, you shouldn’t. But just be careful. This is about to happen.