Anthropic and OpenAI: The Stock Market Battle That Could Change Everything

SpaceX, OpenAI, and Anthropic: An Imminent IPO

In an unprecedented move, SpaceX, OpenAI, and Anthropic are preparing to make their debut on the stock markets. These companies, leaders in their respective fields, are aiming for valuations that defy comprehension, potentially reaching hundreds, if not thousands, of billions of dollars. This initiative marks a discreet yet intense competition between the two giants of artificial intelligence, OpenAI and Anthropic, to be the first to cross the threshold of Wall Street. But what does this IPO really mean for these companies, and what will be the consequences? To clarify these questions, BDM consulted Jérôme Marin, a journalist and founder of the Cafétech newsletter, who closely follows these financial developments.

Understanding the IPO: Stakes and Mechanisms

An IPO is primarily an opportunity for shareholders to liquidate their investments. Companies like OpenAI and Anthropic are currently owned by their founders, their employees—who often receive stock as part of their compensation—and investors who have injected substantial capital during funding rounds. Jérôme Marin explains that these stakeholders are looking to achieve an "exit," meaning they want to sell their shares to recoup their investments. One of the methods to achieve this is through an IPO, where the company issues new shares on the market without placing its entire capital, which constitutes the "floating capital."

Even if an investor were to buy all the available shares on the market, they would only own a fraction of the company. Additionally, historical shareholders are subject to a "lock-up" period during which they cannot sell their shares, typically lasting six months to a year after the IPO.

Raising Funds and Transparency Obligations

The IPO also represents a powerful fundraising lever. It allows the company to raise substantial amounts, as demonstrated by SpaceX, which plans to raise $75 billion. Unlike a traditional funding round, going public offers a quick route to obtain capital. Once listed, a company can easily raise more funds by selling shares, as Google recently did with an $80 billion capital increase.

However, this listing entails increased transparency obligations. Companies must publish their financial results every three months, including revenue, profits, and margins, and respond to analysts' questions during conference calls. This requirement for transparency marks a significant shift for AI labs, which were not previously subject to such constraints.

IPO Glossary

• Exit: The process allowing shareholders to sell their stakes and recoup their initial investment.
• Floating capital: The proportion of shares available on the stock market, usually minority.
• Lock-up: The period during which historical shareholders cannot sell their shares.
• Multiple: A coefficient applied to revenues or profits to estimate a company's value.
• Gross margin: The amount remaining after deducting direct costs, such as those related to operating AI models.

Why the Rush to Go Public?

The recent acceleration towards an IPO can be explained by fierce competition, particularly between Anthropic and OpenAI, to be the first to achieve this milestone. Jérôme Marin emphasizes that the first to go public will capture the bulk of investments in AI, leaving fewer opportunities for those that follow. SpaceX's announcement of its intention to go public, following its merger with xAI, has hastened the plans of other players, initially scheduled for the end of the year but now moved up to September.

This rush is also fueled by market euphoria surrounding AI, with stocks soaring to incredible levels. Marin warns of a potential speculative bubble, reminding us that current valuations seem disconnected from economic reality. He cites the example of SpaceX, whose valuation could reach $1.75 trillion, a figure he deems unrealistic.

IPO Timeline

• SpaceX: The process is already well advanced, with financial accounts already known.
• OpenAI and Anthropic: IPOs are expected around September, much earlier than initially planned.

The goal for these companies is to be the first to capture investor interest in the AI sector.

Beyond the IPO: The Real Test

The IPO will not be the true test for these companies, according to Jérôme Marin. While the IPOs themselves should proceed smoothly, the real challenge will come in the following quarters. Going public ends the companies' ability to control their financial narrative. From now on, they will have to publish detailed accounts, making their financial situation transparent to all.

A key indicator will be the gross margin on inference, which refers to the operating cost of AI models. Currently, this margin is around 40%, which is relatively low for a SaaS model. Out of every 100 euros in revenue, 60 are spent solely on operating servers, even before covering personnel, training, or marketing costs.

To succeed, these companies will need to be not just profitable, but highly profitable, to justify the massive investments made so far. Jérôme Marin concludes that profitability will be crucial to prove that these expenditures were justified and to ensure the long-term economic viability of these companies.