yes Let's get into it.

In last week's newsletter, we did a breakdown of the SpaceX IPO. I wish I could say we were moving on to different, more interesting topics, but unfortunately, we have to keep the train running.

Earlier this week, Anthropic, the maker of Claude, announced that they had filed their IPO paperwork. Given recent rumors that OpenAI is on the precipice of an IPO, this means we now have 3 AI giants rearing to enter the market. 

As we all know by now, SpaceX is looking to IPO in mid-June for around $1.5-2T. And based on their last funding rounds, Anthropic and OpenAI are valued at $965B and $825B, respectively. Many analysts have been speculating that Anthropic will announce their IPO in Q3-Q4, and with the recent filing, that seems likely. Although less certain, OpenAI has been expected to IPO in late 2026.

If this all holds up, these 3 companies could be adding over $3.5T in market cap to the public inside 6 months. This would be unprecedented.

There’s no denying that the market for AI applications is growing fast. All three of these companies have been rapidly growing their revenue from AI subscriptions by the billions. But enterprise applications also have the ability to literally take over the labor market. Hundreds of thousands of white-collar jobs will likely be replaced by AI. This has been causing mass speculation in company valuations; it's the argument SpaceX used to project a valuation of $1.75T and a total addressable market (“TAM”) of $28.5T.

The reality is, even if all three companies' TAM speculations turn out to be true in the future, that may not be enough for their share prices to hold up in the public market in the short term.

The three companies aren’t just competing in terms of tech; they’re competing for funding. SpaceX is planning to raise $75B in its IPO. If Anthropic and OpenAI also go for massive raises, the companies could be competing for $150-200B from investors. There are trillions of dollars out there to be invested, but we could see major liquidity events from investors pulling money from other assets to invest in these three.

With all that said, it's important to recognize that Anthropic and OpenAI may not be in any rush to announce their IPOs. Anthropic has filed its paperwork, but it’s non-binding and gives it flexibility to adjust share prices, target valuation, and fund-raise amounts. It's likely they are going to be watching the SpaceX IPO closely to see how it plays out. If SpaceX flops and its share price can’t hold up, Anthropic and OpenAI may be forced to lower their prices. Investors may get skittish about their trillion-dollar ambitions.

So, in summary, watch the SpaceX IPO closely. What happens on and after June 12 is likely to be the best indicator of what happens with the other two companies. And listen, if they all flop in the market, just take it as a sign you might get to keep your job a little longer.

On Tuesday, everyone’s favorite pro golfer, President Trump, signed an executive order to create a framework for the federal government to review AI models before they are released. Originally, the order was rumored to create much stricter rules around the release of new models. Many people expected mandatory pre-release reviews of new models, a 90-day review period, some form of licensing requirement, and overall just more oversight.

Instead, the order that we received was stripped down, clearly to mitigate these concerns. So the question is, why did we even need an order in the first place? The fact is, AI poses a number of very real threats to any government. Let's list out some major concerns Uncle Sam could potentially have:

Unfortunately for many regular folk, this executive order lays the groundwork for oversight on the first 3 concerns and essentially ignores workplace displacement. 

Clearly, what happened was that the Trump administration knew that it needed to have oversight of new AI models, but it didn’t want to risk slowing down innovation, primarily so we could outpace China.

Instead of requiring a mandatory 90-day review of new models, the order says companies can voluntarily provide the government access to models for review. Additionally, the order explicitly prohibits using it as a basis to create licensing requirements for new models.

The takeaway here is that although AI poses some real threats to the economic stability of the U.S., the current administration is far more concerned with National Security. They simply do not want to risk falling behind China and other nations. 

Being able to review AI before it comes out is a major advantage for the U.S., and mandatory review could prevent security threats from being released, but the administration does not want that oversight to delay progress. So instead, they’re taking a half-ass approach. They’re establishing a light framework for now, hoping the loose oversight doesn’t lead to major security issues, and praying China can’t keep up. We’ll see how this goes.

That's it. Go build something. Or just refresh Twitter, we won't judge.

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