NEW SAVANNA: What about these upcoming tech/AI IPOs? [Crazy, man, crazy]

Wednesday, June 10, 2026

What about these upcoming tech/AI IPOs? [Crazy, man, crazy]

David Wallace-Wells and Natasha Sarin, Wall Street’s A.I. Bet Is About to Become Yours, NYTimes, June 10, 2026.

SpaceX, Elon Musk’s rocket, satellite and A.I. company, is about to go public at a record-breaking $1.77 trillion. This summer, Anthropic and Open A.I. will follow suit, also with sky-high valuations. Are they worth it? The Opinion writer David Wallace-Wells and the contributing writer Natasha Sarin, an economist and law professor, tackle that question and discuss what these I.P.O.s mean for the American economy in the near future and beyond.

Well into the conversation:

Wallace-Wells: Well, I think, at the moment, a lot of Americans look at the A.I. companies and do see an especially vivid illustration of the plutocratic structure of our society, right? They see these five companies [SpaceX, Anthropic, OpenAI, Google, Microsoft]; they’re run by these five visible people. They’re all worth an unbelievable amount of money. And to the extent that we are imagining futures being dictated by the companies themselves, that can be quite scary.

And, to some degree, going public and having government stakes in the companies both address that problem to a certain extent. It would mean that the country, as a whole, is invested in the success of these labs and may benefit to some degree — although at what scale is an open question — from the success of the company. But there are other ways in which some of these approaches — public offerings and/or government investment — don’t change the dynamic. Which is to say — maybe, most notably — if this is a bubble then it’s the public that is left holding the bag. [...]

Sarin: You know, part of what makes me somewhat nervous — and should make everyone nervous — is that it’s not like you and I are alone in our view that, oh, we might be on the verge of a bubble, a bubble might be on the horizon. Last summer, Sam Altman was asked some version of, “Is this an A.I. bubble?” And he said: “Are we in a phase where investors as a whole are overexcited about A.I.? My opinion is yes.”

And another thing that should make us somewhat nervous is: If we look at history, if we look at every large technological innovation that has changed the way that humans work and the way that we all live — most recently the internet, but if we go back to railroads, whatever moment you want to look to — there is a very predictable, in some sense, cycle that you see, in terms of what happens to the economy at those moments of technological change.

Everyone sees the emergence of this new technology and gets really excited about it and its potential for massive change. Investors see that, too, and money rushes into this new technological prospect. And it rushes in productive ways, but it also rushes in ways that ultimately don’t end up being that productive. So, this is, if you think of examples during the internet bubble, like the growth of everything, every company that had .com attached to it. That doesn’t take away from the fact that the internet actually did change all of our lives.

But ultimately, what happens is that the bubble bursts and a bunch of debris is left behind, and that isn’t just about a couple of companies that ultimately fail. It is about what that means from the perspective of the broader economy that we all inhabit — in that, often, those corrections come with deep economic downturns and have the consequence of having large-scale unemployment, having an economy that isn’t growing quickly, having the need for the government to step in as a potential backstop.

And so, from my perspective, the question isn’t are we in a bubble or will the bubble burst? The question is: When?

Wallace-Wells: Yeah, one thing that I think about in this moment, when thinking about the I.P.O.s and what justifies these massive, massive valuations, is: These are five companies, and three of them are going public. In the public imagination, they do dominate the A.I. landscape. But of course, they are only providing one set of products, which is to say access to their L.L.M.s; and they’re providing it in different ways at different price points, at different tiers. But it seems to me like the massive boom story that they’re trying to tell is one that’s a little bit of a holdover from an earlier era of A.I. thinking, in which the companies and the people who are designing the products often talked about artificial general intelligence, artificial superintelligence, and they said that these products are improving so much that at some point they’re going to be able to improve themselves recursively without human interference.

And at that point, there’s going to be a kind of a takeoff in which the products themselves, the companies that made them — and to some extent the economy as a whole — would be rendered almost unrecognizable to people living on the other side of it. Some people call this “the singularity.”

But I wonder how much that still feels true today. And what I mean by that is, I was just looking at some data today, that just over the course of this calendar year, 2026, the amount of use of Chinese open-source A.I. models has tripled, while the use of the American A.I. products has basically flatlined. We see a lot of companies — Uber was maybe the most high-profile one — saying, “We’re actually winding down our employees’ use of A.I. because it was too expensive, given what we were getting out of it.”

And so, if we think about a future in which there’s going to be a superintelligent Borg running the whole economy, then yes, racing to be the biggest, best monopolistic A.I. company is hugely important and it does justify these absolutely gargantuan valuations if you believe that, for instance, Anthropic will be the one to win.

But if you’re thinking about a world in which, yes, A.I. is everywhere, yes, everyone is using it, but it’s not totally clear how many people think it’s super important to pay a huge premium to buy the absolute best-in-class model. And how many more people are likely to think, “I can use this open-source product from China that’s 80 percent as good as Anthropic’s first-rate model and pay only 5 percent of the price.” That’s a very different world.

The A.I. companies used to talk about building a moat — what they could do to secure their advantage. And they thought that getting to something like A.G.I. or ASI faster was the main way to do that. In a world in which that’s at least not imminently on the horizon, and we have all of this low-price competition from below, isn’t it the case that these companies are at some real risk of expecting much, much higher returns than they are likely to get in the medium term?

Sarin: Yes, 100 percent. And I will say something that has given me a fair bit of nervousness around A.I. and the ultimate possible profitability of these companies. ChatGPT was, as you were pointing out, launched in the fall of 2022, which feels like yesterday, but was less than four years ago, you know? But I guess it’s all relative —

Wallace-Wells: It’s both at once. It’s like a whole different era and the same.

Later:

Sarin: And flip side, for a while we were all talking about, and we were hearing a lot about, the idea of singularity or A.G.I. as this gold star that was coming right on the horizon. And now you have people — I’m using Sam Altman because he’s spoken publicly about this recently in ways that have gotten a fair bit of attention, but he’s not the only one saying this — where they’re talking about A.I. and describing it, even internally themselves, as not really all that useful of a term; and kind of describing it as not some sort of magical switch that’s going to flip on at some moment in the short horizon, but instead as the idea that these models are over time going to continue to get better and more useful and more transformational. But that’s not something that’s going to happen instantaneously.

Wallace-Wells: But even the way that you’re talking about these questions is illuminating to me, because you’re talking about, on the one hand, the big A.I. companies, and then the firms that are using them. And when you’re talking about productivity, you’re focusing on the firms that are using them. But these are two separate questions, right? If OpenAI and Anthropic are going to justify trillion-dollar valuations, or even larger valuations, they’re going to have to make a lot of money, too. Even if tons of people are making money on A.I., it has to be in these companies to justify the value.

And when I hear Sam Altman talking about the possibility that, in the future, A.I. will be like a utility in the same way that we pay for our electricity, I think to myself: The electric utilities are not worth a trillion dollars. This is a technology which absolutely has huge transformative potential, but to me, the question is: How much of that is captured by these companies?

Sarin: It feels like both an unanswered question, and an inherently, frankly, unanswerable question. But also, it should make you even more nervous about this bubble conversation that we were having because — and Ray Dalio said a version of this last week — if you’re thinking about it from the perspective of these firms, you have to spend a ton of money and justify these valuations, not just because you’re worried about, like, is this a good way to deploy resources, but because you’re worried about losing market share.

If you’re of a view that the way this all shakes is that there’s going to be one, two, maybe three large players that are able to capture the market, you have to try to be one of them. And that results in, frankly, the incentive structure to spend a lot, and to look like you are doing a lot, in ways that might ultimately not be tied to fundamentals with respect to investment opportunities and what is profit maximizing from the perspective of the firm.

So, you should be worried about that. But there’s another piece of this, which is that the companies themselves are asking public investors to pay prices at valuations that assume that A.I. is going to reshape the economy; and to pay those prices at the same time as these companies themselves haven’t figured out how to stop losing money; and at the same time, as these companies themselves haven’t figured out how they are going to be the ones left standing at the moment when A.I. ultimately is a developed technology with a developed set of market players that we all have grown with and understand. And I think that is something that is just so striking about this moment.

There’s more in the conversation. Bottom line, no one knows what’s going on, what’s going on. More than anyone’s willing to say out loud, it’s a crapshoot.

Some of my more skeptical articles about AI: