SpaceX recently made headlines with the largest initial public offering (IPO) in history, a move that has reportedly elevated its CEO, Elon Musk, to the status of the world's first trillionaire.
Despite its name, SpaceX has increasingly highlighted the significant potential of its high-cost AI division, a strategy that could soon be mirrored by other prominent AI competitors like OpenAI and Anthropic, both rumored to be preparing for their own public market debuts. This burgeoning trend of tech companies entering the public sphere was the central topic of discussion on a recent episode of TechCrunch’s Equity podcast, featuring Kirsten Korosec, Sean O’Kane, and Anthony Ha, who explored the implications of what appears to be an exceptionally active IPO summer.
Sean O’Kane remarked on the profound impact of SpaceX’s market entry, stating, “We have SpaceX not only sucking up just a huge chunk of the money that’s available on public markets, but also really stress testing the limits of what a public company can be and how much it can be controlled by one single person. My eye is really on these other tech companies that will go public and how much they will try to emulate.”
Kirsten Korosec further observed a broader market phenomenon, noting that numerous other startups are striving to capitalize on the "SpaceX IPO wave." She cited the example of companies raising capital for orbital data centers, a concept that gained significant traction following SpaceX’s pioneering efforts.
She elaborated, “So there’s a ripple effect that’s happening throughout the market that I think is probably even more interesting than just the headline, ‘SpaceX makes Elon a trillionaire.’”
The following is an edited excerpt from their conversation, offering deeper insights into the unfolding market dynamics.
Anthony Ha initiated the broader discussion, moving beyond the immediate impact of the SpaceX IPO and Elon Musk’s financial milestone. He pointed out that this event signals the potential beginning of a series of IPOs from various AI companies, referencing the confidential public filing preparations by both Anthropic and OpenAI. He then posed the question to his co-hosts about their anticipation for these upcoming market entries.
Kirsten Korosec began her response by referencing a compelling article by Julie Bort, which she felt aptly summarized the current landscape. She quoted the headline: “It’s not FAANG anymore, it’s MANGOS.” She clarified the original FAANG acronym, representing Facebook (now Meta), Amazon, Apple, Netflix, and Google (now Alphabet).
She then detailed the shift, explaining that the new MANGOS acronym signifies Meta, Anthropic, NVIDIA, Google, OpenAI, and SpaceX. While acknowledging that these remain massive tech entities, she highlighted a distinct change: the inclusion of several AI labs and the exclusion of a major streaming service like Netflix. For Korosec, this reflects a significant reallocation of capital in public markets, moving away from consumer-centric and social networking platforms towards specialized AI labs and innovative deep tech ventures like SpaceX. This shift, she concluded, represents the most intriguing aspect of the current market, beyond the prospect of a particularly demanding summer for reporters.
Sean O’Kane shared a humorous personal anecdote, recalling his earlier ambition to become a lawyer and his subsequent aversion to the extensive paperwork involved. He then quipped about the irony of now eagerly anticipating "hundreds more pages of SEC filings this summer — talk about a beach read."
He continued, describing the current period as a long-awaited moment. For years, there had been speculation about whether the IPO market would "open back up" amidst concerns over private markets and the endless rounds of private fundraising. O’Kane characterized the current situation as a crucial "stress test" for public markets, emphasizing that SpaceX's IPO is not only absorbing substantial public market capital but also challenging conventional notions of what a public company can be and the extent of control a single individual can exert. He reiterated his focus on how other tech companies preparing to go public might choose to emulate this model.
O’Kane further elaborated on SpaceX's unique strategy, suggesting it combines extreme elements from the early 2000s IPOs of Google and Meta with Amazon’s long-term "we’ll lose money forever" approach. He expressed curiosity about whether Anthropic and OpenAI would adopt a similar blueprint, remaking themselves in SpaceX’s image, or if they would strive to present a different market identity.
Anthony Ha then raised a critical point about the timing aspect, noting that the OpenAI IPO underscored the competitive "race" to go public. He acknowledged that SpaceX, being the first out of the gate, likely faces both advantages and disadvantages, also highlighting its distinct nature as an AI company with diverse other operations.
He explained that, according to some analysts, both OpenAI and Anthropic are likely vying to go public before the other due to finite capital and investor interest. There's an underlying expectation that valuations may eventually moderate, prompting a scramble to secure market positions early.
Kirsten Korosec concurred, affirming the intense competition between Anthropic and OpenAI, evident even in OpenAI’s discussions about price reductions and their rivalry on the IPO calendar. However, she cautioned that such tactics represent short-term thinking, advising that a smarter approach would prioritize a long-term strategy.
She then underscored a broader market phenomenon: while major players like Anthropic, OpenAI, and SpaceX prepare for their public debuts, numerous other companies are leveraging the success of ventures like SpaceX to raise capital, often through SPACs. As an example, she mentioned Quantum Space, which, at the time of recording, was pursuing a SPAC deal specifically to "ride that SpaceX IPO wave."
Korosec further elaborated on Tim Ferholz’s reporting, which highlighted other startups that, while not planning IPOs, are building businesses and raising funds based on the potential success of SpaceX’s space data centers. She reiterated, "So there’s a ripple effect that’s happening throughout the market that I think is probably even more interesting than just the headline, ‘SpaceX makes Elon a trillionaire.’"
Sean O’Kane offered his perspective that while the common Silicon Valley theory posits AI remakes the economy through its use, AI is, in fact, "already remaking the economy" simply through the methods people are employing to build it. He referenced the rush of companies to public markets, posing the question of whether they might eventually regret this haste.
He provided compelling examples, such as Ford and General Motors, which are reallocating their unused battery manufacturing capacity to become energy suppliers for data centers. Ford’s stock, he noted, surged upon the announcement of what was, by comparison to Tesla, a rather modest energy storage business. He also cited Tim De Chant’s recent series on GM’s parallel pivot.
O’Kane concluded that the economy is unequivocally being reshaped, with the primary question remaining whether these transformations will prove durable over time, even as they unfold in the present moment.
Kirsten Korosec strongly agreed with O’Kane’s assessment, drawing a parallel to the "next Tesla killer" headlines from five to eight years ago. She observed that automakers and other companies continue to pursue strategies modeled after Elon Musk’s ventures, suggesting they haven’t learned from past attempts. She expressed a desire to communicate directly with automaker CEOs: "I get it that you have a lot of unused batteries and you want to pivot to something else, but trying to model your business after Tesla or SpaceX and others, it doesn’t always work. Perhaps look elsewhere."
Sean O’Kane humorously interjected, "So Ford shouldn’t get into space data centers. Is what you’re saying?"
Kirsten Korosec responded definitively, "No, they shouldn’t. But just watch. This is going to happen."
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