Are AI giants lining up for IPOs the "last hurrah" for US stocks?

An IPO frenzy rivaling the peak of the dot-com bubble is taking shape. OpenAI, Anthropic, and SpaceX, three AI giants, are racing towards the public markets, each targeting valuations of a trillion dollars, together enough to reshape the landscape of the US stock market. This unprecedented wave of listings is not only the ultimate stress test for AI investment logic but will also become the largest variable impacting risk assets this year.

On May 22, according to a Wall Street News article, OpenAI is preparing to confidentially file for an IPO with regulators, potentially going public as early as September this year. The target valuation exceeds $1 trillion, aiming to raise around $60 billion, more than doubling the $25.6 billion IPO record set by Saudi Aramco in 2019.

Meanwhile, competitor Anthropic is also advancing its own IPO plans and has disclosed that Q2 revenue is expected to double quarter-on-quarter to $10.9 billion, potentially achieving operational profitability for the first time. Deutsche Bank pointed out in a research report that the way these two IPOs land is "likely to become a major swing factor for risk assets this year," and is a macro theme that must be closely watched.

However, beneath the eye-catching valuations, the two companies have fundamentally different financial foundations. OpenAI reported Q1 revenue of $5.7 billion, but its adjusted operating profit margin was -122%, meaning for every $1 of revenue, it lost $1.22. It's expected to achieve positive cash flow no earlier than 2029–2030. Anthropic had revenue of $4.8 billion in the same period, with Q2 set to jump to $10.9 billion, and is projected to earn about $559 million in operating profit, already reaching the threshold of profitability.

Analysts point out that while the two companies compete on the same stage, they present completely different business logics, giving public market investors a rare decision to make.

The Largest IPOs in History: A Look at the Numbers

Deutsche Bank notes in its research that regardless of whether it's OpenAI or Anthropic, each IPO will exceed twice the fundraising amount of Saudi Aramco's 2019 IPO. Even inflation-adjusted, it will easily become the largest IPO in history.

Deutsche Bank mentions in another report that if OpenAI reaches its goal valuation of over $1 trillion, it would become the 14th largest company in the world by market cap, just behind Berkshire Hathaway and ahead of Eli Lilly.

By comparison, Berkshire reported over $370 billion in revenue last year with $67 billion in net profit; Eli Lilly had over $65 billion in sales and $21 billion in profit. OpenAI has yet to be profitable, with annualized revenue around $30 billion and only several thousand employees.

From a market capacity perspective, Deutsche Bank believes that the current total US stock market capitalization is about $70 trillion, five times that of the peak of the internet bubble and much more capable of absorbing new listings than in the late 1990s.

Back then, there were nearly 500 IPOs per year on average, compared to only about 120 in this decade, and listed companies are generally more mature now.

In addition, a single $60 billion IPO is just slightly below the total US IPO fundraising in 1999 and 2000 (both about $65 billion per year) and about half the record $119 billion of 2021.

The “Siphon Effect” of Giants and Massive Passive Fund Rotation

As these giants move towards the public markets, their liquidity draw on US equities has received close scrutiny from Wall Street.

With SpaceX, OpenAI, and Anthropic clustering their IPOs, together with Nasdaq's new “fast track index inclusion” mechanism, an unprecedented movement of passive funds is brewing—namely, the siphon effect of the AI giants.

J.P. Morgan estimates that if SpaceX reaches its $2 trillion valuation target and 50% of its shares are floated, passive funds would have to sell about $95 billion of the current top eight Wall Street tech stocks (Nvidia, Apple, Microsoft, Amazon, Google, Broadcom, Meta, Tesla) to make room for rebalancing.

Strategas' Chief ETF Strategist Todd Sohn points out that since the initial float in IPOs is typically just 5% while ETFs track assets worth trillions, such an extreme supply-demand imbalance will make the index inclusion process “somewhat crazy,” and passive investors may have no choice but to buy in at high prices.

Syz Group’s head of trading Valérie Noël says, the market has begun betting on existing large caps coming under pressure and declining.

According to information disclosed on March 28 this year, OpenAI's public listing will serve as a substantive referendum on the entire AI investment logic. The info shows OpenAI expects $13.1 billion in revenue in 2025 but also anticipates a net loss of $14 billion in 2026.

Meanwhile, OpenAI has committed to investing around $1.4 trillion in infrastructure by 2033. If S&P Global, FTSE Russell, and Nasdaq adopt fast inclusion rules, they could immediately force about $24–48 billion in passive fund buys post-listing.

Faced with such massive rebalancing, ordinary investors—whether active or passive—will have their portfolios reshaped as rules change.

Deutsche Bank states in its research that the way these IPOs are executed will be a major swing factor for risk assets this year. PitchBook’s analysis is more blunt:

There is a “systematic quality inversion” in the private market—the companies with the highest valuations score the lowest on business quality metrics once actually priced in the public market.

For ordinary investors holding index funds or ETFs, it’s hard to stay out of this game: regardless of their level of activity, their portfolios will be passively reshaped by changes in index rules.

As for active investors, once the S-1 filing is public and all financial details are in the sunlight, the market will face a clear choice: to believe in a company that has already reached profitability, or to back a giant asking for several more years and hundreds of billions to search for profit potential?

The answer will determine whether this frenzy is the starting point of a new cycle, or the last dance before the party ends.

Fire and Ice: Anthropic’s Profits vs. OpenAI’s Huge Losses

Despite skyrocketing valuations, the two leading AI companies’ financials couldn’t be more different. Anthropic has already started making a profit, shattering the old belief that massive AI spending would drag down short-term profitability.

According to Wall Street News, as reported by The Wall Street Journal on Wednesday local time, Anthropic’s Q2 revenue is expected to more than double to $10.9 billion, with about $559 million in operating profit.

Anthropic’s gross margin has jumped from 38% to over 70%. CEO Dario Amodei once joked that revenue growth has become “too hard to handle.”

The company’s success is mainly thanks to explosive demand for its programming tools from enterprise clients. About 85% of revenue comes from business and developer customers, a model with clear willingness to pay and low service costs.

OpenAI, by contrast, is still losing money.

The data shows OpenAI’s Q1 revenue was $5.7 billion, but its adjusted operating profit margin stands at -122%, losing $1.22 for every $1 earned.

About 85% of OpenAI’s revenue is tied to ChatGPT consumer subscriptions. Despite 55 million paying users, it has 900 million+ weekly active users, and this massive free user base creates a huge inference cost sinkhole.

OpenAI expects to reach positive cash flow in 2029 or 2030; CEO Sam Altman and applications business CEO Fidji Simo are trying to shift focus to direct revenue-generating enterprise clients.

In terms of IPO narrative, the two companies are telling very different stories. Anthropic holds verified quarterly profitability data and could be compared to Salesforce or ServiceNow—a business software company’s logic.

OpenAI needs to convince the market that AI agents, image generation, and eventually advertising will turn its huge consumer traffic into profits.

In Sam Altman’s plan, by 2030 ChatGPT advertising could bring in about $102 billion, but this takes time—which is the scarcest resource when OpenAI is trading losses for growth.

Are AI Giants’ IPOs Really Passing the “Hot Potato” to Retail Investors?

According to Wall Street News, Joachim Klement, Managing Director at Panmure Liberum, sees the AI giant IPO wave as essentially “risk transfer”—dumping early-stage investment risk on retail investors, pension funds, and other institutions to cash out.

He believes OpenAI, Anthropic, and others have chosen to go public while investor sentiment is high, aiming to monetize high valuations before the hype fades. Early institutional investors get to exit the public markets intact, while retail investors and pension funds who buy in will face the risk of financial fundamentals returning to reality.

He directly characterizes this process as “a massive transfer of investment risk from current holders to those willing to pay for a story.”

Klement references Alan Greenspan’s 1996 “irrational exuberance” warning—as the tech bubble burst three years later. He predicts AI hype will likely continue into 2026, since hyperscale cloud providers are unlikely to cut investment; but “the impossible math” will eventually hit reality, “maybe not in 2026, but perhaps in 2027 or 2028.”