AI has transformed the technology sector. This year it may start reshaping capital markets as well.
SpaceX (Unlisted (US):SPACEX)'s blockbuster IPO, formally launched this week with the release of its long-awaited prospectus, is dominating headlines, but the more interesting story may be what comes next. Behind Elon Musk's $75 billion float sits a queue of private technology giants — most notably Anthropic and OpenAI (Unlisted:OPAI) — that are edging closer to public markets at valuations that would have seemed unimaginable only a few years ago.
Several trillion dollars of private-market value is now lining up at the door of public markets. The next challenge is finding enough capital to support it.
SpaceX is expected to debut next week at a valuation of about US$1.77 trillion, making it the largest IPO in history. The valuation would edge past Saudi Aramco's 2019 market debut and set a new record for the most valuable company ever to list.
But while SpaceX is being marketed as a space company, much of the excitement surrounding the float stems from something else entirely: artificial intelligence.
Its filing places AI at the centre of a US$28.5 trillion total addressable market estimate, with Starlink connectivity, AI infrastructure and links to Musk's xAI business featuring heavily in the growth narrative.
SpaceX is opening the IPO window
For much of the past four years, the US IPO market has been subdued.
Higher interest rates, market volatility and weaker valuations left many late-stage technology companies content to remain private. Venture capital funding remained abundant and public markets offered little incentive.
Now that appears to be changing.
Anthropic confidentially filed for a US IPO this week after reaching a valuation of about US$965 billion in its latest funding round, overtaking OpenAI on some private-market measures.
OpenAI is also widely expected to pursue a listing at some point, although executives have repeatedly suggested there is no immediate urgency. Reports have linked the ChatGPT developer to a potential valuation approaching US$1 trillion should it eventually float.
The recent debut of AI chip developer Cerebras offered an early glimpse of investor appetite for the sector. While much smaller than SpaceX, Anthropic or OpenAI, the listing was closely watched as one of the first major pure-play AI infrastructure floats of the current cycle.
Collectively, these companies represent several trillion dollars of private-market value waiting on the sidelines.
The real test is investor appetite
What makes this cycle unusual is not simply the size of individual IPOs. It is the possibility that several of the largest listings in market history could arrive within a relatively short period of time.
Some analysts estimate SpaceX, OpenAI and Anthropic alone could seek more than US$200 billion from public investors. That compares with roughly US$45 billion raised across the entire US IPO market last year.
In theory, strong demand exists. Technology remains the market's dominant investment theme, AI spending continues to surge and investors are actively searching for new growth stories.
Yet capital is not unlimited.
Large institutional investors operate within portfolio constraints. Every dollar allocated to a SpaceX or Anthropic IPO is a dollar unavailable for another listing, private funding round or existing public company.
That dynamic is already influencing corporate decisions.
Databricks chief executive Ali Ghodsi reportedly said this week that the company would delay any IPO plans, describing the current environment as a difficult one for new listings as the three giants prepare to compete for investor attention and capital.
Rather than joining the queue, Databricks appears content to wait for it to clear.
Private markets meet public reality
There is another reason investors are watching closely.
Private investors have been willing to support increasingly ambitious valuations throughout the AI boom. Public markets may prove more demanding.
SpaceX generated US$18.7 billion in revenue last year but remained loss-making, while some analysts have questioned whether current valuations leave much room for disappointment.
That tension may become the defining market story of the next 12 months.
The AI boom created a generation of trillion-dollar private companies. The next challenge is discovering what public investors are actually willing to pay for them.