SpaceX, Anthropic and OpenAI’s Trillion Dollar IPO Plans

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Daniel Bach (0:17)

SpaceX and OpenAI sprint toward blockbuster public listings. Plus, Anthropic's explosive growth pushes it into the black.

Bradley Olson (0:25)

These AI companies, a lot of them, spend far more money than they take in. So the fact that Anthropic has grown so quickly and had this much revenue and that that revenue far exceeded its costs was highly unexpected.

Daniel Bach (0:39)

And Tesla says its fully self-driving tech is launching in China. It's Thursday, May 21st. I'm Daniel Bach for The Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today.

Wall Street is bracing for a historic wave of tech listings as two of the world's most valuable private companies prepare to test the public markets. Yesterday, we learned that OpenAI is preparing an IPO filing that could land as soon as tomorrow. That news came as Elon Musk's SpaceX unveiled its blockbuster S1 Prospectus, setting the stage for a landmark debut that could make Musk the world's first trillionaire. Reporter Becky Peterson covers Musk for the Journal and says this first look into the financial health of SpaceX provided quite a few surprises.

Becky Peterson (1:27)

It's losing a lot of money. The company lost almost $5 billion last year, and that's on $19 billion in revenue. Its Starlink satellite internet business is doing pretty well. Starlink was more than $11 billion of its revenue. It also has this space rocket launch business that's about $4 billion.

And then it has the AI arm, which it acquired when it merged with XAI this year. And XAI is bringing in $3 billion, but it's also coming with a lot of losses.

Daniel Bach (1:56)

The filing also gave some major insights into what Musk expects for the future and for that imminent SpaceX IPO.

Becky Peterson (2:03)

Inside the S1, there's this very Muskian language about having what it sees as the largest actionable total addressable market in human history. That means basically that SpaceX thinks it has the most opportunity ever to acquire customers, to sell its products to people. So it says that its TAM is $28.5 trillion.

That's hundreds of billions of dollars from space-enabled solutions, trillion dollars in satellite internet services, and then $26.5 trillion in potential AI business. It's really hoping that investors see upside on their investment, even though its financials today don't quite justify its valuation.

Daniel Bach (2:49)

Another key detail, Becky says, is how much control Musk has at the company.

Becky Peterson (2:54)

He has these Class B super voting shares, which will give him control of 85% of the vote at SpaceX. That means that other investors, management, people who buy SpaceX shares on the market, they will have basically no say in what happens at the company. You won't be able to remove Elon as CEO, and you won't be able to get anything changed without his approval.

Daniel Bach (3:17)

That said, Musk's pay package is contingent on SpaceX reaching some pretty incredible goals.

Becky Peterson (3:22)

His one billion shares that ride on his ability to make a permanent human colony on Mars of one million people. And it's just so out there that it's almost hard to believe, but they're saying, okay, if you actually do this crazy thing that you've been saying you're gonna do, we'll reward you for it.

Daniel Bach (3:42)

And crucially, the S-1 filing did not reveal where SpaceX plans on listing or how much it's hoping to raise.

Anthropic's growth continues to rocket higher. The Wall Street Journal has viewed the AI start-up's financial projections shared during a current funding round, which show the company's second quarter revenue is set to more than double to almost 11 billion dollars, up from 4.8 billion in the first quarter. That breakneck pace means Anthropic expects to turn its first-ever operating profit this quarter. Journal Deputy Tech Editor Bradley Olson says that goes against the industry narrative that massive computing costs hurt profitability in the near term.

Bradley Olson (4:21)

This growth is being driven by a lot of companies and businesses that are interested in Anthropic's AI systems and tools and the ability of Anthropic's AI to do kind of automated work, to take long tasks and to work on them for hours. And Anthropic's AI is able to do this. Other ones are able to do it too. But Anthropic's has really gone viral since early this year. And a lot of companies are using it and trying it.