Sometimes, when spirits are boisterous, the equity markets become the scene of a giant dust-up. Companies rush to list, spying enthusiasm for their sector or for new stocks in general. It happened in the first quarter of the year 2000, and again at the beginning of 2021. Now, with SpaceX, OpenAI and Anthropic all eyeing initial public offerings, it is likely to happen again. In the past, moments of overheating have not ended well.
One problem this time around is that all three companies are targeting the same market. SpaceX reckons the big prize is the $22.7tn spent globally on “enterprise applications”, meaning software and things that replace it. A new project called Macrohard, founder Elon Musk hopes, will “fundamentally transform how companies are structured and operate”. Yet that’s also where Anthropic is heading, with its automation tools and coding aides. OpenAI, maker of ChatGPT, wants a piece too.
An investor could, of course, buy all three. That, though, may mean selling elsewhere. The potential flood of new equity into the market is going to be enormous. If each company raises just 5 per cent of its mooted valuation, it would imply more than $180bn of new capital. For comparison, the entire haul in 2000 was $106bn, according to Dealogic, roughly $200bn in today’s money.