And also set up moats so for security only they are allowed to push the state of the art forward.
Paraphrasing Bill Hicks.
So true. I know I'd rather be murdered by an American ASI than a Chinese one.
Everyone's eager to get a slice of these pre-IPO companies, and the marginal utility of having it be more liquid on the public markets probably doesn't outweigh the legal requirements behind going public. It's not like VCs are stuck holding the bag until an IPO these days. I'm not sure why that changed, but it's probably not healthy.
I know plenty of companies that are failing on VC dime, whose investors can't sell their equity. I disagree that everyone wants a slice of these companies. It's not clear to me whether it's a net win for VCs to hold onto illiquid investments for so long (meaning I can see both the upsides and the downsides.)
To me it's pretty clear. The earlier investors take out all the possible upside and then dump it on the retail market. The retail investor will be less and less able to buy stock that will grow 10x and more. It's hard to imagine SpaceX, OpenAI or Anthropic will multiply in value after the IPO. They are priced in a way that they have to execute perfectly for a long time to justify even their current price.
Just another step for the super wealthy to keep profits for themselves instead of letting the broader population to benefit.
VCs just want returns on the money, and they don't need to use the stock market for that as much anymore.
The thing is normally it's money that's intended to be burned in the search of a unicorn, cheap money, so there's no real "risk" there.
Also, I think comparing WeWork to AI labs is not valid.
These labs have increasingly become of public interest and are shaping economies around the world, WeWork was just not at that level.
The JOBS Act and proliferation of double-vesting trigger RSUs effectively negated these forcing functions and 'going public' went from a necessary growing pain to a burden and distraction.
I think the fact that we have so little information is the most important information we have. If OpenAI had a sound business plan and was on strong financial footing, they'd have IPO'd.
All of this continued stalling and obfuscation can only mean one thing, IMO: OpenAI has no long-term viability and they're desperately hoping for some new breakthrough to reinvent their business model before the VC money faucets turn off for good.
No he wasn't wearing a red ball on his nose. He didn't even smile saying this. Dead serious.
But for the US this is the last throw of the dice. All chips on red.
Sam parlayed working for YC into owning a significant holding of Reddit (and other companies?).
To me, he appears to be a successful parasite that selects the fattest hosts. There are plenty of people that laud VC culture.
Silicon Valley No Revenue: https://www.youtube.com/watch?v=BzAdXyPYKQo
OTOH, if a company has a sound business plan and strong financial footing it may not need to IPO -- unless the founders or VCers want out ASAP.
OpenAI hasn’t had any problems getting impressive amounts of funding. So why ipo?
Who knows what Altman wants? It's moot what individual motivations are as he is definitely fronting for investors who have significant power in the business.
Public money comes with legal fiduciary duties.
The reason to IPO is to get private money out, materialise the whole valuation.
The oversimplified view that has been drilled into startup discussions for years has been that IPO is the singular goal for every startup and they need to get there as fast as possible, but that hasn't been true for a long while. There are high profile examples like Stripe with no intent to go public any time soon. Some public companies are even gradually doing share buybacks partially to remove their public exposure.
Being a public company kind of sucks in many ways. I'll admit my sample size is small, but every post-IPO CEO I've known has expressed some regrets about going public. It was a fascinating revelation to me after being raised on the idea that IPO is the ultimate victory goal of every startup.
The only reason they’re not doing it is by choice, because they want to find an optimal time to maximize their returns.
There is no “we’re trying to IPO but can’t”. If they were actually trying, it would be in motion.
If He fails to arrive, or arrives late, they will be the railroad financiers in the Panic of '73.
Whatever private-market liquidity events they will be permitted to participate in will be highly disadvantaged compared to the other two groups.
What does adding a few more suckers to the pile of tens of millions of other suckers do to those that get the real benefits? It’s not like after they achieve their goals, the people who helped them would have the ramp or resources to recreate the process.
If you've made tens of millions of people unemployed over the timeline of a few years, then you no longer have nearly the market to sell goods and services - including your AI - to.
Assuming these guys answer that with "let's make UBI" - which is a huge assumption given the way SV fetishizes those who "create value" and looks down upon those who don't - you now basically have tech feudalism. The remaining upper crust "generously" pays the rest of the population enough to not starve until they die.
You'll basically have an entire society in stasis, with no hope of improving their lot, being given the bare minimum to keep humans alive, if that. Well, no hope of peacefully improving their lot.
It won't be a promised land at that point.
Comparisons to feudalism kind of sell the direness of the AGI vision short: in feudalism, the lord still depended on the peasants. The lord would be inconvenienced if he had them all killed. Not so with AGI! He won't even notice their gone.
Besides as much as I love UBI it requires Star Trek technology: ubiquitous space travel and replicators.
Not being profitable in itself is not a problem or has not been historically. With software, there’s a bunch of investment into making the service but the variable cost of providing it is negligible. It’s ok not to be profitable because the growth of userbase will pay you back. Capex isn’t a thing, you can just rent somebody else’s from the cloud. This is how the world used to work pretty much for a quarter century, ever since the dot-com bubble. But OpenAI is not like it. Their variable cost is huge as is the capex to enable being able to even make that cost happen. It’s not that they are not profitable, it’s that their financial profile does not fit into anything this generation of decisionmakers is used to.
If a startup is riding a hype cycle and is one of two leaders in the global industry with unreal growth numbers, they can IPO whenever they want. The incentives lean toward doing an IPO before the hype runs out, not delaying it.
If they were worried about running out of VC money, going to the public (the P in IPO) would be the move.
Companies don't actually have to go public quickly or even at all, even though that's been drilled into us as the only goal of every investor-backed startup.
I'm not certain OpenAI or Anthropic have a viable business, either, but Spacex definitely pulled a massive scam.
This is the entire game if you zoom out.
Exit -> Recycle some of the money so USA stays ahead. That is the entire game, you see it right...? I hope you do.
Spacex is transparently a scam to steal from people's retirement accounts. Normally, that would be a thing that wouldn't be encouraged by regulators, and our president wouldn't have participated in the scam. Times are not normal.
Yes? They were geared up for IPO this year until pushing it back. See all the marketing shenanigans around solving mathematics for this month's flavour. They have a balancing act to manage between the hype and the reality of the business.
What about Stripe?
In the last ~month, OpenAI announced a delay to its IPO and Anthropic put a relatively near-term range on its IPO date. These are very different signals.
they are 50/50 at best.
These are useful and too big to run locally.
The ultimate size of that business in terms of revenues and profits may not match current expectations, but it's also not 0
ok, where are:
- The economies of scale?
- The network effects?
- The switching costs?
- The intangible assets (e.g. brand?)
Running AI models for a fee has none of these. At best, there are some economies of scale for running a datacenter, but OpenAI and Anthropic have none.
The business logic is similar to the general transition to cloud. Corporations and individuals are better off paying someone else to manage physical hardware that they just access over the network. That is even more true of large, expensive, fancy AI GPUs than regular web servers.
OpenAI and Anthropic may both fail, or may not, I don't know. But I'm sure there is some kind of viable business running some kind of AI in the cloud.
The problem is that the investment does not expect "some kind of viable business" ROI needs to be in the order of several trillion for this to make any sense.
That money may not be made back in the way people hope.
But there is a whole ecosystem of companies on OpenRouter etc. who have a viable commodity business serving Chinese open source models on GPUs. I'm sure at least some kind of business like that will survive even if OpenAI and Anthropic completely fail. And I'm sure AWS, GCP and Azure will end up having something like that too.
I'm absolutely certain that we will reach that point, just not when. Could come sooner than we think though.
Remember a few weeks ago when all the AI labs said "we need to slow down, to uh, prevent destroying the world"?
Is there no end to this kind of lazy conspiracy theory
You see it time and time again.
Posters like simian are in denial and delusional about reality.
He ought to google ‘tacit collusion’.
So yeah, if they stop training models forever, Anthropic will probably start making a profit... until someone else with better models comes along to eat their lunch.
[1] https://www.morningstar.com/news/marketwatch/2026091414/the-...
How confident are you that these firms are going to survive if they’re fudging the numbers?
All these figures are so utterly weaselly. AAR is a made up measure to make them look good. If they cannot show GAAP numbers, they are hiding something. Full stop. While as private companies they are under no legal obligation to show us their books, their PR and intent to go public requires it.
Earnings Before Bad Things.
If an AI company can exclude the cost of training the new models they release every three months from the business of whether they are profitable, it would be shocking if they weren't profitable. And the figure is tiny compared to the valuation they appear to be seeking, and may only be positive because of a short term boost.
Steve Eisman said the other day that he suspects part of Anthropic's rush to get to IPO is that their third quarter figures are terrible.
And suggesting that maybe accounting norms should be changed so they could pretend that they were actually profitable despite the minor detail that they were consistently spending way more than they earned at any given point in time.
This was back in 2024 or so and the zeitgeist was still focused on the idea of the labs racing to AGI instead of building and selling products, with Sam Altman opining about whether money would even exist under AGI and his laughable suggestion that OpenAI might decide to give every American citizen shares in OpenAI for some reason.
If nothing else at least now they seem to be scrutinized more like regular tech megacorps instead of a sort of private yet benevolent Manhattan project of ascetic technopriests building a utopia machine.
And now they spend more time talking about building a doomsday machine that will kill you all and also show you ads.
(And yeah, there’s always some new variation on “we should be able to call it capex”)
My low level conspiracy theory is AI is encouraging habits of people not to read so noone can read statements like "we excluded our costs from our profit calculation"
The reason is that companies can choose the best timing to go public - when their financial look the best - and they do. Anthropic trying to go public very soon is a good tell their financial look pretty decent. OpenAI postponing the IPO is a very good tell theirs look bad.
This is a fallacious assertion, there are so many big private companies with strong businesses that stay private for a whole variety of reasons. E.g. Stripe, Revolut, Databricks, etc.
You're letting your bias leak out here.
It all starts to look like a very low margins business, and reminds me very much of telecom industry.
[1] https://www.a16z.news/p/state-of-markets-ii
[2] https://www.reuters.com/business/media-telecom/openais-ad-bu...
This also coincides with a growing market for private credit and VC which certainly helps companies stay private for longer.
In 2012 this was relaxed in JOBS Act which relaxed the 500 threshold to 2000 but more importantly it ignored employees so now private companies of gargantuan trillion dollar valuation and thousands of employees have no disclosure requirements.
So, this is a classic case of regulation that did well but was relaxed and now creates hidden risks.
[1]: https://www.investopedia.com/terms/5/500-shareholder-thresho...
We have historical data on how it worked out for companies that were pushed into going public by the old regulations... Microsoft, Google, Facebook, et al.
Their early stage employees did... pretty well... financially.
The only real difference from the employee perspective is that a lot of the money that made them rich came from public investors (who also had a chance to make a lot of money), whereas now it only comes from private investors and the public is locked out.
I'd say it's the growth of private markets to allow companies to keep getting funding even at the $100 billion range while staying private that has fueled the trend to stay private rather than SOX and other new regulations for public corporate governance dissuading them from going public.
Which regulations are these?
It's not that you couldn't stay private before, but there wasn't much benefit because after crossing that cap you had reporting obligations comparable to public companies anyways.
>Regulations that limit the ability of investors to invest in private companies ...
The JOBS act raised the cap from 500 investors to 2000, but with VC funds, that's hardly an issue. Does Anthropic (and other unicorns) really need 500+ VC backers? It might change behavior on the margins, but it's hard to imagine that's the cause for the paucity of public listings.
The actual change that made it more tenable to stay private is arguably the carveout for employee stockholders, but summarizing that as "limit the ability of investors to invest in private companies" is a bit misleading.
Before that change companies like MS were in essence forced to IPO, because they'd get all the downsizes of public reporting, without the benefit of accessing market liquidity. So once you were over the threshold, it made no sense to not go all the way.
That's no longer true, and has coincided with a huge expansion in private equity funding growth stage companies vs needing public liquidity. As a result these IPOs being done after their growth stage is largely over are offering the public a very different bet that tech company IPOs of the past.
My guess would be - oxytocin, cortisol and dopamine regulation, or rather the failure of said regulation.
no way it ever gives you a return like, say, the amazon IPO could've.
Losses are much more privatized staying private. Instead of hitting people's 401k or pension fund, this is mostly contained to a concentrated set of VC and PE investors, not large public markets.
See: SpaceX and the Nasdaq 100 rule changes.
IPO, insiders cash out, retail holds the bag
This is definitely by design and encouraged by the VC’s. It’s disgusting to consider what a simulacrum of a market the stock market has actually become.
There's a good recent YouTube video about the shift in regulations that switched IPOs from being a way to raise money for growth to being a way to dump on retail investors after all the significant growth has been funded by private investors:
I’ve asked at rapidlu growing unicorns where I’ve worked “why don’t we ipo” and the big wigs every time just say, “why?”
If the original point of the ipo was to raise money and now you can do that privately, it stands to reason that a simple explanation might be that it’s not worth the hassle until the VC’s say they want their money back
But they need the money. After all that has already been invested they still need more. That is all I need to know about any delusions that they are currently profitable.
https://www.reuters.com/legal/transactional/openai-targets-3...
Not really. It'd be a dotcom bust, not a 2008 bust. The average American isn't substantially exposed to these companies and the banking system doesn't hinge on them, there's no systemic risk.
What it would do is wipe out the wealth of a lot of very affluent folks and private investors, which most of us could live with.
win at what? 98% of Americans aren't going to care if a meteor drops on SV tomorrow. The day FAANG is done I'm throwing a party. I wish that incestuous industry would finally kick the bucket, 95% of American programmers don't even work there.
Do you seriously think anyone's shredding a tear if Zucc's net worth drops to zero and that privacy nightmare of a company is gone? Don't threaten me with a good time
And yes, they will be acquired by a company which will have survived the next crash at a fraction of their currently estimated valuation and we will truly have the next ride of the economy .. many years ahead if 2001 is an example.
- economy has been slowing down (the real one, the people) while stocks are at record high
- a long overdue business cycle which has been pushed back and back and back ...
- rates hiking (in a slowing down economy)
- bubbles, and that AI bubble is huge. Loving AI on an every day basis but revenue wise, it's not mainstream, far from it. Average people want free stuff, they're good with Google or Facebook throwing them ads, they don't want to pay $200 for a subscription and fact is, 2026 revenues are about $100b totall. Meanwhile hyperscalers are spending about $1 to $2 trillion alone in 2026, and meant to increase within the next few years. You need a lot of imagination to see how this can "flatten" nicely.
Like internet didn't disappear after 2001, AI is here to stay, too. But...
OpenAI is already at about $50B in annualised revenue, up from $21B at the end of last year. That puts it on track to beat its internal projection of $58B by year-end.
Of course, none of this answers the trillion-dollar question of whether that growth will continue. But that question is separate from the claim that OpenAI needs to go public before we can see what’s going on. If anything, I think it’s better for them to stay private while venture capital keeps funding them and until they’ve shown they can sustain their growth. The longer they wait before raising public money, the less risk they add to public markets.
Right now we have a ~$1 trillion company which a ton of the “economy” and valuations are based on, with near zero information on how it’s doing.