I think it's because the private market can't possibly go any higher. OpenAI is already valued at around $1 trillion and just raised $122b.
The only next step is the public market.
The only next step is the public market.
Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble:
https://www.multpl.com/shiller-pe
This is already close to being the frothiest market in US history.
Consider two competing forecasts for AI: it's a "normal technology", or it will be superintelligent.
If it's a "normal technology", where's the moat? Why won't this turn into a boring commodity business, like telecom after the bubble? Sure, railroads transformed the US, but that didn't prevent investors from losing a bunch of money first: https://news.ycombinator.com/item?id=47900502
If it's superintelligence, we're most likely either all dead (in which case you helped cause human extinction by investing, congratulations) or else we're living on generous UBI: https://www.astralcodexten.com/p/you-have-only-x-years-to-es...
If you think you can get all the _public_ to pull their short term bank deposits into stock .. well, (a) you've not met the Germans, and (b) that is how the economy of Albania collapsed in a pyramid scheme.
At the same time of these companies IPO'ing, they are also trying to bend the rules of the index funds and their markets (Nasdaq,S&P 500) so that they can get listed into these index funds asap.
And when these happens at such obscene levels, what happens is that a very sizable chunk of the S&P will get into these companies (5-10% is a very large number for a single company especially such companies within these index funds IMO)
and their whole plan is that then banks and other investments sitting on cash would then invest in it. Oh by the way, your retirement funds might also be linked to it all.
The fact is that there is a race with multiple companies (SpaceX,Anthropic,OpenAI) all trying to IPO and get listed on the stock markets as soon as possible.
If EU depositors want exposure to US AI firms, why didn't they already withdraw their money to invest in Microsoft/Google/etc.? I'm a bit doubtful that an OpenAI IPO is going to trigger major shifts in asset allocation.
BTW, in Shiller's book which was published right as the dot-com bubble popped, he has a chapter listing out similar late 90s structural factors, many of which could lead to permanently higher stock prices in theory.
Fortunately for them, the current SEC is highly in favor of short-term market manipulation.
Shiller PE is near 44. Japan had an equivalent price to earnings ratio of over 70 during their 1989 bubble.
Knowledge Atlas Technology (Z.ai): 57B
MiniMax Group: 26B
Deepseek: 45B (rumored)
That's surprising to me; I thought (or heard) that it was low 3-digit millions.
We prefer red blooded American scam artists here, buddy. Hell, Elon probably found some bullshit way to recognize Chinese AI as Twitter revenue, used to buy cyberattacks to sell to SpaceX.
How many public companies even get 122b? They definitely can go higher if they really are that valuable. With public companies come the other factors which might not be based on the actual value and can cause people to throw money.