S&P 500's Impact on Future AI IPOs

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Welcome to the podcast. Kicking 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, and 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. And 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 AI Chat newsletter. It's on aichattedaly.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. It 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 gonna 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 gonna be successful long term. Now, is this some sort of indication that SpaceX isn't gonna be successful long term? I don't think so, but I think they're just saying, look, we have these rules, you gotta follow them. And while SpaceX is missing out on about $14 billion in automatic passive buying, OpenAI and Anthropic are both gonna, you know, because they're not also gonna get included, they're both gonna 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 knows as well. The NASDAQ 100 is going to let SpaceX in 15 trading days, and FTSE Russell's Russell top 500 is gonna 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 gonna be smaller, but still it's gonna get some passive inflows. The reason why I think this matters is because S&P 500 right now, this is sort of interesting move for index discipline, right?
They're saying, look, we're gonna follow our rules over the capital flows. They're missing out on a lot of money. A lot of people may go and invest their money directly into SpaceX when they could have just bought the S&P 500 knowing that they would get a piece of SpaceX. So now they have to go and take either their money out of the S&P 500 or put money that they might have put into the S&P 500 alternatively and put it directly into SpaceX to get exposure to this stock. Specifically, as these companies are, you know, hitting these trillion-dollar valuations, OpenAI, Anthropic and SpaceX, all of those are not gonna be in the S&P 500 for at least 12 months because of the rules. And so if you want to get a piece of those, you gotta go direct. So an interesting move by the S&P 500, but I do respect some of the discipline there. Google is going to be paying SpaceX $920 million a month to rent XAI compute capacity. This is to get access to 110,000 NVIDIA GPUs. They're gonna get this through June of 2029 It's a 32-month deal. And this is just being disclosed as SpaceX is prepping for their $1.75 trillion IPO, which is happening next week. So, we have this massive IPO coming up, and they've dropped this news on us. Obviously, SpaceX is trying to increase their revenue as much as possible ahead of this IPO. The deal is gonna run starting in October this year. So, if they have a massive run, you know, they're training something huge with Grok right now, they could probably have everything kind of done, buttoned up and moved on by the time this is happening. A lot of people are saying, well, does this mean that, you know, SpaceX isn't getting the usage they hoped for Grok? Either way, they're making a lot of money, so I think they're probably in a happy place. But this is going to cover GPUs plus CPUs and memory components, and it's all going to be inside of SpaceX's data center, and this is going through 2026 This is SpaceX's second huge compute deal, Anthropic, like we know, they signed a $1.25 billion a month agreement last month for the entire Colossus One Memphis facility. Google's alphabet is facing $180 to $190 billion in 2026 CapEx. They announced an $85 billion stock sale this week to help fund that. I think they're showing that they're expecting even larger AI infrastructure costs in 2027 So basically, everybody wants more compute, and SpaceX had kind of an overbuild, it would seem, as they're kind of selling off to Anthropic and to Google. And while, you know, some people would have said like, hey, look, you guys are going to be in the hole for overbuilding. Well, it turns out you can just turn around and sell it to all of your competitors who seem to have an endless demand for their AI. This is particularly important when you look at the fact that SpaceX's AI unit is losing $2.5 billion a quarter and they have $2 billion in monthly contracted revenue locked in. So I think they're going to try and make sure they can keep pushing that number up. I would expect perhaps we might even see more people signing deals to buy some of their compute.