With SpaceX, which absorbed xAI, the developer of "Grok"; OpenAI, the maker of "ChatGPT"; and Anthropic, the maker of "Claude," all pursuing the largest initial public offerings (IPOs) in history this year, concerns are emerging that the New York stock market could feel strained by the wave of new share listings arriving all at once. Beyond new listings, rights offerings being pursued by Google, maker of "Gemini," and Meta, the parent company of Facebook, to secure AI investment funds are also cited as another variable that will supply a large volume of new shares to the stock market.
Generally, when buying demand remains unchanged while large volumes of new shares flow into the market, oversupply can drag down stock prices across the board. Moreover, when companies that are currently running losses or have small profits—like SpaceX, OpenAI and Anthropic—form high stock prices based solely on future growth potential, overall pricing pressure inevitably arises in the stock market. Furthermore, successive new share issuances could be interpreted as signals that "tech companies are short on cash" or "now may be the peak," dampening investor sentiment. Mega IPOs can have the effect of absorbing existing market funds, as in the current SpaceX case, while rights offerings can result in diluting the value of existing shares.
The key question is whether the explosive supply of AI-related new shares will further stimulate the industry boom and create even greater stock demand. At present, there are too many uncertainty factors to predict this accurately, including the Federal Reserve's monetary policy, the level of inflation, geopolitical risks such as the Middle East war, and shifts in the artificial intelligence (AI) technology competition landscape.
OpenAI Secretly Files With U.S. SEC... All Three Top IPO Candidates Launch Listing Efforts
According to Bloomberg on Monday, OpenAI recently filed an IPO application confidentially with the U.S. Securities and Exchange Commission (SEC). Bloomberg reported that OpenAI is discussing the possibility of a listing as early as this fall together with Goldman Sachs and Morgan Stanley. With this, all three companies considered the largest IPO candidates this year—along with SpaceX and Anthropic—have now submitted listing applications to securities authorities. OpenAI said in response, "We have not yet decided on the timing of the listing, and it could take more time."
OpenAI first introduced ChatGPT to the world on November 30, 2022, establishing itself as the company synonymous with generative AI. Until the second half of last year, OpenAI was widely regarded as the undisputed top generative AI company and the most valuable private firm. However, it now faces somewhat shaken fortunes following Google's release of "Gemini 3.0" using Tensor Processing Units (TPUs) on November 18 last year and Anthropic's advances. OpenAI CEO Sam Altman was so shocked by Gemini 3.0 that he issued a "code red" to employees on December 1 last year. According to The Wall Street Journal (WSJ), OpenAI failed to meet its internal goal of securing 1 billion weekly active users (WAU) by the end of last year, as well as its annual revenue plan. Even this year, it has fallen behind Anthropic's Claude in the enterprise market and has failed to meet its monthly revenue targets several times.
The Information reported that OpenAI CFO Sarah Friar already confided to some colleagues early this year that the company was not ready to list within the year, citing massive spending and procedural issues. She also recently conveyed to other executives at the company her concern that "if revenue does not grow quickly, we may not be able to cover AI data center costs going forward."
Anthropic also confidentially submitted a draft listing application to the SEC on the 1st of this month. On the 3rd, Bloomberg reported that Anthropic had selected Goldman Sachs and Morgan Stanley—the same as SpaceX—as IPO underwriters, targeting a listing in October.
Anthropic is the company that instilled fear in the market that it would replace software (SW) sectors one after another by launching "Claude Cowork" on January 12 this year. Recently, it also turned the global security market upside down with its "Claude Mythos" model, which could become a powerful hacking tool. Anthropic's Claude captured Wall Street's attention by demonstrating unrivaled capabilities in the operation to capture Venezuelan President Nicolás Maduro and in the Middle East war situation.
Anthropic was valued at $965 billion (about 1.496 quadrillion won) in its Series H investment round last month, surpassing the $852 billion that OpenAI recorded at the end of March this year. Wall Street expects Anthropic to overtake OpenAI in revenue as well starting from the second quarter this year. It is also expected to succeed in turning a profit, unlike OpenAI, which remains in the red. Until early this year, Anthropic had been valued lower than OpenAI, but it reversed the competitive landscape in less than half a year.
Wall Street's Big Banks Compete to "Promote SpaceX" by Gathering Ultra-High-Net-Worth Individuals
SpaceX, the U.S. aerospace company set to debut on the Nasdaq market on the 12th, is expected to serve as a barometer for whether OpenAI's and Anthropic's IPOs will succeed. The New York Times (NYT) reported Monday that Wall Street's big banks are actively using the SpaceX IPO to attract ultra-high-net-worth individuals. The NYT reported that Wall Street's big banks are pitching to ultra-high-net-worth individuals by guaranteeing IPO subscriptions or offering access to top management.
In detail, JPMorgan, the largest U.S. bank, held an investor presentation conducted directly by SpaceX CEO Elon Musk at its Manhattan headquarters in New York last week. About 350 wealthy individuals were invited to the presentation, including New England Patriots owner Robert Kraft of the U.S. National Football League (NFL) and Home Depot co-founder Kenneth Langone. CEO Musk's investor presentation was also live-streamed to a total of about 3,500 customers at 90 JPMorgan branches across the United States.
Bank of America (BofA) also held an investor event for about 5,000 customers on the 4th to watch a presentation by SpaceX executives. Morgan Stanley, which is co-managing the IPO with Goldman Sachs, also plans to hold an investor presentation by SpaceX management for its high-net-worth clients this week. In an investor presentation document on the 4th, Morgan Stanley offered a rosy forecast that SpaceX's revenue, which was $18.7 billion last year, will grow to $3.4 trillion (about 5,300 trillion won) by 2040. SpaceX is a company that recorded an annual net loss of $4.9 billion (about 7.3 trillion won) last year.
In an amended IPO filing on the 3rd, SpaceX raised its target valuation from $1.75 trillion to $1.78 trillion (about 2,760 trillion won). According to the Financial Times (FT), SpaceX plans to raise a total of $75 billion (about 116 trillion won) by selling 555.6 million shares, or a 4.3% stake, at $135 per share. It is highly unusual for an IPO company to fix its offering price first without even presenting a price range ahead of demand forecasting. Of the new funds SpaceX will raise through this listing, $22.5 billion (about 35 trillion won) will come from individual high-net-worth investors.
As mega private firms accelerate their IPO efforts, this time the existing AI big tech companies have begun stepping up large-scale rights offerings. The aim is to secure funds in advance before investment capital is concentrated on the large IPOs.
Earlier, Google's parent company Alphabet announced on the 1st that it would launch an $80 billion (about 120 trillion won) rights offering to invest in AI infrastructure. This is the largest rights offering in history, surpassing the $70 billion of Brazil's state-run oil and gas company Petrobras in 2010. For Alphabet, it is also the first rights offering in 21 years since September 2005.
Of the total, $70 billion will be raised through a public offering, and $10 billion through a private placement to Berkshire Hathaway via third-party allotment. Of the $70 billion raised through the public offering, $30 billion will be sold via a method in which underwriters fully purchase the shares and then resell them, while the remaining $40 billion will be sold through an at-the-market (ATM) offering, in which underwriters sell the shares into the market from time to time. Goldman Sachs, JPMorgan and Morgan Stanley served as deal underwriters.
Alphabet further disclosed on the 3rd that it would increase the size of the rights offering from $80 billion to $85 billion (about 130 trillion won). Alphabet explained, "AI demand from businesses and consumers is exceeding the company's supply capacity," adding, "We want to expand our investment scale to broaden the infrastructure that will support the important growth opportunities ahead."
"Fearing Funds Will Be Taken Away," Meta Reviews Rights Offering After Google's 130 Trillion Won Move... Market Supply Hinges on Whether AI Investment Demand Holds
Wall Street expects that now that Alphabet has opened the door to rights offerings, other hyperscalers (ultra-large cloud operators) lacking funds for AI data center investment will also pursue similar methods one after another. The combined capital expenditure (CAPEX) plans announced this year by the five major hyperscalers—Alphabet, Amazon, Microsoft, Meta and Oracle—total about $750 billion (about 1,125 trillion won). This scale is expected to continue growing for some time even after next year.
In fact, according to Britain's Financial Times (FT) on the 5th, Meta immediately began reviewing a rights offering of tens of billions of dollars in response to Alphabet's news. Meta is reportedly considering a mandatory convertible preferred stock method, just like Alphabet. Mandatory convertible preferred stock has the advantage of raising funds immediately while delaying the issuance of new common shares by a few years, easing the shock to the market. Meta is planning capital expenditures of up to $145 billion (about 226 trillion won) this year. This is less than Amazon ($200 billion), Microsoft ($190 billion) and Alphabet ($190 billion), but more than Oracle ($50 billion).
With the combined valuations of SpaceX, OpenAI and Anthropic expected to reach a total of $4 trillion (about 6,000 trillion won), and hyperscalers also rolling up their sleeves for rights offerings, concerns are spreading on Wall Street that the burden of new share supply could weigh on stock prices.
In particular, the effects of new shares, such as overhang (potential selling volume), are expected to significantly impact the stock market from next year, when lockup volumes for SpaceX, OpenAI and Anthropic are released after their listings. Existing listed companies may also face supply-demand pressure even before that due to adjustments to major index constituents. With the SpaceX listing as a catalyst, the Nasdaq exchange shortened the period required for inclusion in the Nasdaq 100 index from a minimum of three months to 15 trading days. FTSE Russell, a subsidiary of Britain's London Stock Exchange Group (LSEG), also revised its rules to reduce the index inclusion waiting period to five trading days. Another burden on the overall market is that "bubble theory" could resurface depending on the degree of divergence between the three companies' earnings and stock prices after listing.
Already, Alphabet's stock fell 4.48% through the 8th since the rights offering announcement on the 1st, even amid a rising market. Meta's stock also fell 6.72% over the two trading days from the 5th to the 8th following reports of the rights offering review. The dilution effect is already appearing.
It is also worth watching that capital outflows could occur from small and mid-cap AI partner firms that had become buying targets in place of OpenAI and Anthropic, which are private firms that cannot be traded. Companies like Marvell Technology, which designs and supplies custom chips to Anthropic and OpenAI. In this regard, S&P Dow Jones Indices announced on the 8th that it would add Marvell to the S&P 500 index from the end of this month. On the 2nd, Nvidia CEO Jensen Huang praised Marvell CEO Matthew Murphy at "Computex," Asia's largest information technology (IT) expo held in Taipei, Taiwan, calling Marvell "the next company that will be worth $1 trillion." Marvell's stock has soared 239.90% this year.
The burden of new share supply pouring into the New York stock market ultimately depends on how long the AI investment fervor lasts. If stock buying demand continues to surge, it will pass without much shock, but if the trend falters even slightly, a somewhat different atmosphere could unfold from the time of OpenAI's or Anthropic's listing in the second half. This is also a factor that could significantly affect the hyperscalers' deliberations over playing the rights offering card.
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