Barriers to AI IPOs from S&P 500 Rules

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If you want to get access to this episode and my next 30 episodes all ad-free, so there'll be no ads on them, go check out my podcast AI Chat. You can go search for that on Spotify or Apple. It's AI Chat. I'm going to post all of these news episodes, and I'm also posting interviews. Like I just interviewed the CEO of Cohere. They've raised over a billion dollars for their AI model, talking about what they're going to be spending the money on and the direction of the AI industry, along with all of this new stuff. So if you want to go check it out with no ads for free, it is AI Chat. Welcome to the podcast. Taking this off, the S&P 500 is refusing to change the rules for SpaceX to join the S&P 500 This is also going to block OpenAI and Anthropic when they do their inevitable IPOs here coming up quickly from joining on a fast track. We also have news that Google is going to be paying SpaceX $920 million a month to rent XAI compute capacity. This is on top of what Anthropic is already doing. Enterprises are blowing past their 2026 AI token budgets by 3X and a lot of them are trying to figure out how to put controls on this. The CEO of Airbnb, Brian Chesky, is starting his own AI lab. He was formerly advising Sam Altman. I think he's going to keep doing that, but now he's going to be spinning up a lab which could be directly competing.
Speaking of competitors, about 90 investors currently hold stakes in both OpenAI and Anthropic. I want to break down some of the numbers about why this is and why it is pretty uncommon for this type of thing to happen in Silicon Valley. I wanted to mention, if you want to get all of these news stories in an email to your inbox every single day, go subscribe to the AIChat newsletter. It's on aichatdaily.com, my own site. You can click the subscribe tab in the top corner and you can subscribe to this newsletter. It's free. It goes out daily and I vet every story, what's going on, I reorganize it and try to give you basically all the extra details that sometimes aren't covered in the podcast. You get a deep dive or sometimes if you don't have time to listen to the podcast, I'll leave a link in the description to aichatdaily.com. I'm blown away, it has a 40% open rate. People that listen to it love it. We have listeners from all the top AI companies, so go check it out. Link in the description. Okay, let's talk about what's happening with the S&P 500 They have refused to bend the rules for SpaceX and of course this is going to block OpenAI and Anthropic in the future too. But basically, SpaceX went and they requested that they could skip kind of some of the standard rules for getting fast-tracked into the S&P 500, and the S&P 500 said no. It's pretty obvious why SpaceX wanted it. They would have basically given them $14 billion in automatic, passive fund-buying just by getting included into this. But the S&P actually has rules to get included. One of them is a 12-month seasoning period. So basically, once you IPO, you gotta wait 12 months before you can get added. I guess this is just to make sure that companies don't just boom and bust, and it doesn't have any sort of negative impact on people in the S&P 500 There's also a 10% float requirement, and there's a profitability screen that some of these huge IPOs, especially these AI models, don't really have right now, these AI companies. So because of all of that, SpaceX didn't actually qualify. And the idea here is that it's going to protect the $7.5 trillion fund, the S&P 500, right? One of these mega funds from basically absorbing any sort of unprofitable or these companies that have these huge caps, but maybe they're not going to be successful long term. Now, is this some sort of indication that SpaceX isn't going to be successful long term? I don't think so, but I think they're just saying, look, we have these rules, you got to follow them. And while SpaceX is missing out on about $14 billion in automatic passive buying, OpenAI and Anthropic are both going to, you know, because they're not also going to get included, they're both going to miss out on $8 billion for OpenAI and about $4.6 billion for Anthropic, according to Bloomberg Intelligence, if they had kind of got in there early as well. But I think because they're saying no to SpaceX, those other two are basically no's as well. The NASDAQ 100 is going to let SpaceX in 15 trading days and FTSE Russell's Russell Top 500 is going to let it in in 5 days, which is far faster than they normally do. But these are in no way as big in size as the S&P 500 So there's going to be smaller, but still it's going to get some passive inflows. The reason why I think this matters is because S&P 500 right now, this is sort of an interesting move for index discipline, right?