Get ready to take sides in Big Tech’s giant IPO bake-off

{"text":[[{"start":4.8,"text":"Sometimes, when spirits are boisterous, the equity markets become the scene of a giant dust-up. Companies rush to list, spying enthusiasm for their sector or for new stocks in general. It happened in the first quarter of the year 2000, and again at the beginning of 2021. Now, with SpaceX, OpenAI and Anthropic all eyeing initial public offerings, it is likely to happen again. In the past, moments of overheating have not ended well."}],[{"start":34.55,"text":"One problem this time around is that all three companies are targeting the same market. SpaceX reckons the big prize is the $22.7tn spent globally on “enterprise applications”, meaning software and things that replace it. A new project called Macrohard, founder Elon Musk hopes, will “fundamentally transform how companies are structured and operate”. Yet that’s also where Anthropic is heading, with its automation tools and coding aides. OpenAI, maker of ChatGPT, wants a piece too."}],[{"start":66.9,"text":"An investor could, of course, buy all three. That, though, may mean selling elsewhere. The potential flood of new equity into the market is going to be enormous. If each company raises just 5 per cent of its mooted valuation, it would imply more than $180bn of new capital. For comparison, the entire haul in 2000 was $106bn, according to Dealogic, roughly $200bn in today’s money."}],[{"start":null,"text":"

"}],[{"start":92.4,"text":"So how to choose? It depends what qualities an investor most prizes. OpenAI has locked up a vast supply of computing power, which is likely to become a scarce asset. It has already secured 10 gigawatts ahead of schedule; SpaceX’s own facilities currently equate to 1GW of capacity. Anthropic, less blessed with chips and servers than its peers, is now renting from Musk at a putative rate of $15bn a year."}],[{"start":118.80000000000001,"text":"Or maybe having the best, most monetisable products is what marks a winner. In that case, Anthropic looks like the better bet. Its Claude coding engine has become a go-to for professionals and amateurs alike. The company’s expected revenue this quarter of $10.9bn, double that of the previous quarter, looks hard to beat if it happens. Musk’s AI segment made $818mn in the first three months of the year."}],[{"start":144.65,"text":"There’s a third criterion on which SpaceX might actually be the winner: having the best plan B. If AI proves less remunerative than hoped, Musk’s company at least has a big satellite communications opportunity in Starlink, which is where all of its profit and almost all of its revenue derive. And there’s always asteroid mining and colonising Mars to look forward to."}],[{"start":166.65,"text":"These differences are blurring, and will blur more. The race for product supremacy, at least, is still up for grabs; recall that until a year or so ago, OpenAI’s ChatGPT seemed to have cornered the market. And in choosing between a troupe of billionaire tech founders, each with their own blend of eccentricity, stubbornness and charisma, some investors will go with vibes. In that sense, this IPO bonanza and previous ones look very much alike."}],[{"start":202.15,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779534823_1983.mp3"}