AI IPO rush fuels Wall Street optimism—and worry

AI IPO – As major AI companies race toward Wall Street listings, their push for public capital is meeting a growing debate about whether the market is getting ahead of the technology—and the money behind it.

On paper, the timing looks perfect for Wall Street’s biggest wager: a wave of AI companies is moving toward initial public offerings this year, with valuations that would make even long-time market watchers blink.

The technology’s momentum has helped lift stocks to record highs, and the stakes are enormous. Building and maintaining AI models takes vast sums. while ambitions tied to artificial general intelligence—and the need to keep pace with fast adoption—have added urgency to every funding decision. In that environment, going public is being treated as the cleanest, fastest path to cash.

Michael Field, chief equity analyst at Morningstar, put it bluntly: “These companies are now burning through cash to win the AI race, and public equity is the cheapest source available, particularly in a rising interest rate environment.”

But even as excitement grows, unease has not gone away. Some experts worry the industry is pouring too much money into a technology that is still young and unproven, raising the specter of an AI bubble.

SpaceX

SpaceX, led by Elon Musk, has become one of the most striking examples of both scale and financial strain. Last year, SpaceX was valued at $800 billion. Its value rose to $1.25 trillion after SpaceX merged in February with Musk’s artificial intelligence company, xAI.

This month, SpaceX is planning an IPO that could be among the biggest stock sales ever—even though the company is currently losing billions each year. In a May regulatory filing, SpaceX reported losing $2.6 billion from operations last year on $18.7 billion in revenue.

The losses did not pause at the start of this year. xAI, which includes the Grok chatbot, also posted heavy operating losses: it lost $6.4 billion in operations last year, according to a company document.

Musk also faced pushback from some SpaceX investors when he had SpaceX buy xAI earlier this year. They protested that the move looked like a bailout and was unethical, given that Musk was a controlling shareholder in both companies.

SpaceX said on Wednesday it plans to raise up to $75 billion when it goes public this month. The company’s plan would set the stage for the largest-ever stock market debut and could put Musk on course to becoming the world’s first trillionaire. An offering of that size would also break the record for the largest IPO. set by Saudi Aramco in 2019 when the oil giant raised $26 billion.

Anthropic

Another major name moving toward a Wall Street debut is Anthropic, the maker of the Claude chatbot. The company was formed in 2021 by ex-OpenAI leaders and has quickly climbed into rare territory: it was recently valued at $965 billion, making it one of the world’s most valuable startups.

Anthropic is preparing to go public. On June 1, it announced it submitted a confidential filing with the U.S. Securities and Exchange Commission for a proposed IPO.

The company has said it is making annualized revenue of $47 billion by selling its technology to people and organizations using Claude to write code and do other work and personal tasks on their behalf.

OpenAI

OpenAI, the maker of ChatGPT, began in 2015 as a nonprofit dedicated to developing AI for the common good. It is now a company valued at $852 billion that is planning an IPO as soon as this fall.

The company’s situation underscores how quickly the competitive landscape has shifted. While OpenAI helped set off the current AI boom, Anthropic’s meteoric rise and Claude’s growing popularity have left OpenAI playing catch-up.

Elon Musk, an OpenAI co-founder, is also still entangled in the story through litigation. In an unsuccessful lawsuit against OpenAI and its top executives. Musk claimed the company diverted from its founding mission to make more money. OpenAI countered that Musk was simply seeking a bigger slice of the company. OpenAI has not yet reported filing initial IPO paperwork with the SEC.

AI heavyweights already public

Not every AI bet is waiting for a first day of trading. Google’s Gemini AI assistant was built in response to a competitive threat posed by OpenAI’s ChatGPT, which came out in late 2022. Gemini AI models are integrated into Google search and other products such as Maps.

Alphabet. Google’s Mountain View. California-based parent company. was valued at $4.54 trillion at the beginning of June. up from $2.3 trillion a year earlier. The growth has been interpreted as a sign that Alphabet’s AI spending is producing dividends. even with investor worries about massive AI investment across the sector.

Meta’s approach has been more directly embedded into its platforms. Meta has integrated its assistant. Llama. into all aspects of its business. including advertising and consumer-facing tools such as a digital assistant that can help with daily tasks. as well as image and video creation. Unlike many rival models, Llama is open source, meaning it is largely available to the public and to developers. Meta AI is available as a standalone app and is integrated into Meta’s smart glasses. Meta’s market value as of early June was $1.55 trillion. down from $1.76 trillion a year earlier amid investor concerns about the company’s massive AI spending.

Microsoft. which went public 40 years ago. may not have been able to fall behind given the role it played early on. Its multibillion-dollar investment in OpenAI helped provide the computing power and financial backing that allowed OpenAI to build ChatGPT. In turn, Microsoft used the same technical foundation to power its own AI assistant, now called Copilot. The once-exclusive partnership has since evolved as both companies look to other partners to advance their AI ambitions.

Put together, the rush toward IPOs is not just a story about new technology—it’s also a story about timing, money, and pressure. Field’s warning about cash burn sits alongside the market’s appetite for scale, even as skeptics point to the risk of overreach.

For now, the numbers suggest the rush is still accelerating rather than cooling. The market is moving, and with it, the question many investors are quietly asking is whether Wall Street is funding a future—or financing a bubble.

AI IPO Wall Street SpaceX IPO Anthropic IPO OpenAI IPO Claude ChatGPT xAI Grok Morningstar Michael Field Alphabet Meta Microsoft Copilot