Anthropic confidentially submits draft S-1 to the SEC
anthropic.com
anthropic.com
Not to mention the insane wake-up call it is going to be for these AI stocks when 3 months after they launch they have to start making earnings calls and showing their financials. That quarter-by-quarter pressure and scrutiny is no joke, and probably the biggest downside of going public.
I'm bullish on AI, but kind of bearish on any specific AI company. None of the initial big dotcom companies like AOL or Yahoo survived at the scale they briefly had.
Their conclusion: It might be bad, but so be it. No need to change strategy.
It being in the public markets is something you can deal with if you want.
It being in private markets means you cannot choose to participate in the upside if you want.
A lot of people have been using it to passively invest in AI (via QQQ).
It’s nonsensical for a variety of reasons but we live an era of the stock market just being another casino…
Are AI companies capable of turning a profit today if they turn some knobs?
Theoretically, if training more expensive models stops resulting in better capabilities or isn’t economically viable, the labs can shift gears into making profit on old models. A lot of future growth is priced in so this would lead to a collapse in share price if it happens anytime soon.
There’s a story out that Anthropic might be profitable this quarter. This is in one sense bad news - it means that the company wasn’t aggressive enough about acquiring capacity last year, because they didn’t foresee how fast their inference business would grow. Anthropic is now forced to make suboptimal choices about serving existing users vs. training the next model (need to scrounge for capacity by paying other players like SpaceX). And as a Claude Code user I feel like I’ve been affected by that, what with the random outages and performance degradations.
You cant possibly believe we'll be just spending more and more in tokens endlessly.
And if the margins are so good for anthropic they will collapse. There's too much competition in the field.
I agree Anthropic faces some risk they could get commoditized, but on the other hand if things go well they could end up leading adoption into more industries. There are upside and downside scenarios. Recursive self-improvement is obviously an important unknown and could lead to winner-take-all.
In contrast, there was overwhelming doom and gloom for Google's IPO, in spite of their incredible growth and margin economics. In time, the doomers were proved wrong.
There's so much doom and gloom about Anthropic that directly contradicts their astounding growth and margins. For a long-term investor, Anthropic is looking a lot more like Google not AOL.
I can only hope the doomer narrative dominates until I can get a few shares at a reasonable valuation.
Vibes are almost always wrong. Ignore the vibes and focus on revenue growth rates and inference margins.
The normies are all still excited/scared and the valuation based on secondary trading is going up and up.
Maybe not quite as crazy as the dot com boom but I'd say the current environment for AI and related equities is a lot closer to the mid/late 90s than 2004
Normies have never heard of Anthropic, where the economics are incredible and doom vibes are pervasive.
Citation needed for that one.
I doubt you will. Most likely IPO reference price will be like SpaceX's, 100x ARR or so.
You're better off buying Google who own a huge chunk of Anthropic at a much saner average.
But if it's 40x in October, and inference margin is strong, and revenue is still growing 20% per month, then I'm in.
https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...
100x is staggering. These companies are priced as though we are already chewing through the solar system to create AI computronium. I'll pass--I expect I'll get a UBI when that scenario happens anyway.
I'm betting more on the successors to this initial group of AI companies. The ones that have to build actual profitable businesses.
Most of us were using 56k modems to access the internet back then, Google's search returned results within a couple of seconds. Yahoo, Lycos, Excite, Alta-Vista were still loading. Then the search results themselves were so good you could often just pick the first result. They eventually added a button which just took you directly to the first result. Which I used.
Your memory is faulty. AltaVista was always super fast--it never had the advertising bloat that the other ones had until the very end.
The problem AltaVista had was that it didn't scale when the Internet went exponential--so AltaVista would give you good search results until you asked current, topical questions. AltaVista relied on running a single, super-expensive stonking huge Alpha machine while Google ran on lots of commodity servers that spidered constantly.
See https://www.usenix.org/legacy/publications/library/proceedin... for the 1997 server count, which was before we got to the three tier architecture.
We also spidered constantly. A couple of those huge backend Alphas were dedicated to holding the constant spider index. AV had a well earned reputation for quick discovery, although I think Google wound up faster. We suffered a bit from maintaining separate indexes for the main corpus and recent pages, and I imagine Google handled that better.
But the period of time when our main index went to hell was the period of time when we failed to do a new main index crawl for several months. I won’t get into why that happened politically because my memory isn’t perfect and I don’t want to criticize anyone who won’t see this to stand up for themselves, but it’s absolutely the case that we let the index get stale.
And I will say that I think the execs were distracted by the idea of challenging Yahoo by buying a shopping site and a local news site of sorts and, unlike the Google of the time, they lacked the wisdom to focus on our primary product.
And now I fade back into the hedges, until the next time AV comes up… I suspect a high percentage of my HN comments are on this exact topic. It makes me sad.
And I still miss the AltaVista illustrated diagram (Java Applet) that would allow you to drill down and specialize the search results. No modern search has ever matched that, again.
Perhaps we could nerd snipe Marginalia Search to add it :)
Following your comments and trying to trail things out, the only thing I can find is a reference to AltaVista LiveTopics.
https://dannysullivan.com/why-search-sucks-you-wont-fix-it-t...
I suspect what I used was that "GRAPH" button in the AltaVista Refine picture.
We might want to archive that image. It seems like the only evidence that this stuff ever existed.
https://www.researchgate.net/figure/Alta-Vista-LiveTopic-Gra...
which has some different coverage.
I did try to archive the blog you linked but unfortunately the owner is blocking it with robots.txt
User-agent: ia_archiver Disallow: /
I suspect it was a later incarnation that I used.
> It was a fun place to be.
It was. I was in the hardware side during the Hostile Giveaway(tm) to Intel and Compaq.
Good luck with your cat.
We were big AV users initially, I think for 2 years? This was 94-97 so my memory of the time periods is fuzzy. When Google came along I have very vivid memory of it providing not only better search results but also faster loads times.
I wonder if Google was already geo-distributed at the time? Latency was real then, it wasn't uncommon to hit 350ms (compared to 20-50ms to Europe) and the difference would have been felt back then. It was a killer for Counter Strike.
I was a relatively early investor (2008), but I was very hesitant early on because Microsoft was building an integrated search function, which became Windows Live Search, which became Bing. I definitely remember it took me to the beginning of the financial crisis to finally decide that it was going nowhere. I suspect it was the development of Google Maps that changed my mind.
Without those prescient and lucky acquisitions, we'd be talking about a "Google" that looked much more like Yahoo.
It wasn't search proficiency that built the empire, it was leveraging a transient search quality advantage into cash flow, then plowing that cash into acquisitions to construct a durable moat.
That didn't happen because they were magically amazing at search forever.
It happened because Google had a good business plan and could afford to throw gobs of money at engineers and infrastructure, in quantities that even Microsoft was unwilling to match.
Simple text ads to start. It was built on MySQL, Java and C++ and became how they made most of their money.
Most of the time, they're wrong half the time.
I conjecture that some amount of the "doomer posting" is a consequence of other people realizing what you realized here and attempting to sway public sentiment for personal gain.
* It's a bubble, it crashes (no moat etc.)
* It's not a bubble, we get superintelligence, it's not nice, it squishes us all like bugs
* It's not a bubble, we get superintelligence, it's nice, we all get UBI
From the perspective of your personal financial security, the range of scenarios where you want to invest in Anthropic seems rather narrow. And I don't like to fund the creation of something which might squish me like a bug.
We’ve already seen a startup make a chip which generates a hundred pages of text in milliseconds. When companies start bringing out hardware like that for cutting edge models, the entire business is dead. AWS will just eat the market.
And ignore debt you can't pay back? Fine during ZIRP era because there was always another $50M around the corner. There is no extra $50B around the corner.
They've all over-invested in AI, same as the railroads, and it will collapse the same way.
They (together with OpenAI and maybe Google) can have better margins on frontier models, but the demand on those got to be much lower
The growth of the Internet will slow drastically, as the flaw in “Metcalfe’s law”—which states that the number of potential connections in a network is proportional to the square of the number of participants—becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.
(Why do people try to criticise AI as "probabalistic" like this matters? Unreliable I get, but early Wikipedia and Geocities were as deterministically unreliable as the amateur and fiction sections respectively of a bookstore)
The issue is that the way the rules have been changed, risky stocks have been added to a product that is meant to be stable.
A 401k, any retirement focused product, is not serving its purpose when it tags on risk.
Having people in the later part of their lives find they are broke, becuse despite them doing everything right, a loophole was created to extract their savings.
This is simply not right.
I could be wrong, but the margins are so good because there isn't a "substitute" for the frontier models. The performance difference between the latest Opus and a more open model provider is large enough to justify the extra cost. If that difference shrinks, I think the cost people are willing to pay will go way down.
there are ways for you to manage your risk if it in public markets, theres nothing you can do if its in private.
What? No. VCs, pensions, etc aren’t corporate investors in any common terminology.
Retroactive reasoning with investments (if I just bought X) is insane.
They IPO'd in 1980, yet their stock price was below the IPO price for the majority of 1980-1987.
It also fell to its IPO price for an extended period of time between 1996-1998.
You hypothetically could have waited 20 years after the IPO before investing without giving up theoretical gains.
What? How? By moving out of Massachusetts? I could understand banning such a speculative stock for e.g. pension funds or whatever, but blocking private individuals from buying with their own money seems insane.
I really dont see how America doesnt collapse on the weight of its own corruption. But maybe the was the plan all along....
Of course, it doesn't always go up...
I think you have an oddly negative bias.
how long does this last? I've been hearing it for a decade.
For someone holding VTI its closer to 3% and a 2050 fund its more like 1.5%. Indexing is how most people are investing in their retirement accounts because controversies like these just don’t matter much. Hedging this off is going to cost more than its worth.
Hedge funds already know broad based mutuals will have to purchase these so can sneak in before them and then sell to them for a marginal gain. Mayhaps the newest strategy for exiting is generating so much hype that you're guaranteed an exit by retail retirement funds?
[edit:typo]
SpaceX was a profitable company, it was heavily invested into R&D and had managed to build a tidily profitable connectivity business in Starlink. Now the company is being burdened with all the worthless debt of X and xAI with a likely merger with Tesla following launch just to hand Musk a big check when he hits the valuation targets.
IPO inclusion on indices should be illegal, the price discovery simply hasn't happened yet and it's a direct grab at the most vulnerable retail investors - the passive index huggers that were told that if they just buy an index it'll never be spectacular and it might dip but it'll steadily go up.
I would not be surprised if the US Government ends up bailing out retirees over this and cements the country's descent into debt. Pretty much everyone can see it coming, but we have to act as if Elon is valuing his companies in good faith and not just trying to rob a payday.
Assume that Anthropic, OpenAI and SpaceX all IPO and get included in SPY with the new fast listing rules. They are likely to be worth $3-4T combined, which means 'retail' investors are going to have perhaps 5% of their portfolio in it.
_Arugably_ that's a pretty fair allocation for retail investors to have to these "moonshot" style companies.
Also - if any one of these IPOs don't go well; I suspect the other(s) will have to postpone, further reducing exposure.
Everyone I know who invests in an index fund is doing so to mitigate the risks of things like "moonshots" which are typically much riskier investments.
Regardless SPY is actually a pretty "risky" index fund on some measures - it pays a (very) low dividend compared to many other intl/ETF funds and is weighted very heavily towards tech stocks (atm).
If you genuinely wanted to mitigate risk you would probably not choose SPY.
Given that they've had to change the rules of index funds to allow for this, yes, this is not what people expect.
Also, the rules have changed before. It's not the first time these rules have changed.
I see both sides of the argument (it's definitely _not_ good for 401k investors if Anthropic/OpenAI/SpaceX make huge leaps in technology that allow for far higher earnings that they aren't able to access, for example).
But my main point is that these investors regardless would "only" have 5% exposure to these. That surely cannot be considered a systemic risk that the OP is inferring.
There's nothing special about the number $1T.
> Everyone I know who invests in an index fund is doing so to mitigate the risks of things like "moonshots" which are typically much riskier investments.
The whole point of an index fund is to capture the growth of the whole market. If you wanted low risk you'd be buying bonds.
If I'm not reading it wrong though NASDAQ introduced a 3x multiplier for low-float stocks like SpaceX is most likely going to be (and maybe OpenAI and Anthropic too if they see that it works). A 15% exposure is then going to be pretty big.
Eg say spaceX has $50bn of float at $1.5T valuation. If there wasn't _any_ cap at all, the full $1.5T would be used as the market cap. With the (new) 3x cap, it means only $150bn of the $1.5T valuation is taken into account in the index weighting.
Before this change, SpaceX wouldn't clear the 10% requirement to be listed in QQQ at all. So the 3x basically allows them to be included but _does not_ increase their market cap from $1.5T to $4.5T.
Btw, for clarity, I'm not saying there isn't questionable behaviour going on here. My main point is that even if SpaceX, openai and anthropic all went to 0 (unlikely IMO), it's not going to have a material impact on people's retirements which is what OP was proposing.
At least at first the spacex free float will be quite modest.
If they are the only moonshot style companies in their portfolio, and if they crater that's the physical equivalent of a 160lb person carrying a gallon of milk around with them wherever they go. At least until they've drunk it I guess.
Lots of "ifs" in that sentence now I read it back though.
I started as being very skeptical circa 2024, became more open minded towards the end of 2025, and am becoming skeptical again now. Reason being, I interact with entrepreneurs now and I see what they hope for in AI. The universal desire seems to be "people will just talk to AI instead of me while paying me the same as before or more". This is typically covered with coping mechanisms (e.g. "I am not building a chat bot, I am building..." after which they describe a chat bot).
I think the crash is getting more likely because the disconnect between what the technology can be used for does not match what people want it to do.
The most recent change was the NASDAQ adopting the "fast change rule" which allows newly IPO'd companies to be listed in the index after only 15 days of trading. This rule was decided March 30, 2026 and only came into effect May 1, 2026.
The plan is to rapidly drive these prices up in the first 15 days, get the companies listed in the NASDAQ so funds are forced to purchase them at higher prices, then leave retirement accounts holding the bag.
Meanwhile some of these companies are also lobbying to be able to only have to submit annual or biannual earnings reports, too.
Everyone is looking for multiple ways to leave the dumb money holding the bag.
And there are plenty of ways to manipulate the price, such as issuing a low float to a hyper hyped stock..
And yes often a falling knife
This is pretty predictably wall street & federal regulators scamming normal people, retirement funds, etc, taking their fees and exit window at everyone else's expense
Where are you getting this timeline from?
- The initial pop is known to be manufactured by banks, so mostly benefits insiders, so good time to diversify. I'm conservative so sold to cover effective basis or whatever risk strategy :)
- The lockup period (6mo) is a similarly known artificial event, and studies show that
- Tech companies take ~8 quarters of prep for the IPO as they do financial engineering to transition from VC growth-at-all-costs to public $, and I'd expect the same for whatever nonsense they pulled to juice numbers to shake out. And that's not including oddballs like the Musk alternate universe, just normal tech companies covering up EBITDA and low interest rate madness.
- Tech is especially volatile as an industry, so even more skepticism here. Eg, the latest IPO I was involved in was a successful professional social network play, and chatgpt killed it.
Most/all of these are googleable things
Lock-up expiry is a real effect. Everything else you mention is Reddit stuff—trading the pop is practically a gamble.
Maybe the confusing point was my involvement is (discounted) pre-IPO shares, which almost by definition, is not an activity accessible to retail investors.
If you're really worried and want to be conservative tell the portal you want to retire in 2030. That will allocate your investments to something conservative and you'll be more protected from a downturn. On the other hand, you'll also be equally protected from an upswing.
/not a financial advisor
There's maybe, at best, 1% of the country even aware that this might be a problem.
Saying you as in any random person can protect themself from a group of dedicated experts who also have access to levers the common person can’t pull, is kind of not believable on its face.
I would have less of an issue if the inclusion in major indexes was delayed 6-12months but we are looking at inclusion within like 5 days for some of these indexes.
https://finance.yahoo.com/markets/stocks/articles/spacex-ipo...
VTI in turn is the primary holding of most of Vanguard's Target Date retirement funds, which are widely held in 401ks.
> CRSP indexes were also recently changed to better accommodate fast entry. New IPOs are eligible for CRSP's suite of indexes after five trading days, provided they pass the index's eligibility and investability screens. Previously, these screens included having at least 10% of shares qualifying as freely tradeable (known as float shares outstanding, or FSO). However, in April the methodology changed to allow stocks with either 10% FSO or approximately $3.3 billion in float-adjusted market capitalization to be eligible for index inclusion. The weighting of stocks in CRSP indexes is also based on free float, which should help address the investability challenges associated with thinly traded stocks.
* https://www.schwab.com/learn/story/some-indexes-accelerate-e...
Other indexes do not have these multipliers, and are much larger. The exposure for e.g. VTI is far, far less.
There's no way they could have done that without telling those investors the S-1 was prepared and awaiting their signature on the round before they hit Submit, so to speak.
> Stocks would become eligible for the index after six months rather than 12 months. The requirement to have a minimum Investable Weight Factor of 0.10 (roughly at least 10% of shares publicly floated) would be dropped. Companies would not be required to demonstrate profitability.
* https://www.schwab.com/learn/story/some-indexes-accelerate-e...
Though:
> Still, S&P Dow Jones reminds market participants that the proposed changes would apply only to index eligibility. The actual inclusion of new constituents remains entirely at the discretion of the index committee.
Dumb question: why couldn't retirement accounts simply not purchase these?
Or one that just imposes a reasonable waiting period on adding newly-IPO’d listings.
It makes sense. They intend to track the market as it is.
Though, you can definitely make the case that the popularization of index funds has allowed their holders to essentially become patsies to hype IPOs.
Even with the CRSP indexes this was recently changed to make fast-tracking for these IPOs easier.[0]
> CRSP indexes were also recently changed to better accommodate fast entry . . . Previously, these screens included having at least 10% of shares qualifying as freely tradeable (known as float shares outstanding, or FSO). However, in April the methodology changed to allow stocks with either 10% FSO or approximately $3.3 billion in float-adjusted market capitalization to be eligible for index inclusion.
That change is notable because both Anthropic and SpaceX are planning to IPO at well under that old 10% requirement.[1] Neither would have qualified for fast-track inclusion before, but both are virtually guaranteed to clear the absolute valuation bar.
[0]https://www.schwab.com/learn/story/some-indexes-accelerate-e...
[1]https://www.economist.com/finance-and-economics/2026/06/01/c...
The float requirement changes are directly due to these huge IPOs only placing small amounts of float on the market. Their goal seems to be tracking the market and making this change prevents them from excluding two notable companies from their indexes.
IIRC CRSP indexes are float-weighted so they aren't going to attempt buying a ton of these IPOs anyway due to that low float.
Again. Would I have made the change? No because placing that little float on the market isn't kosher IMO.
https://indexes.morningstar.com/insights/analysis/bltcd8e699...
These IPOs will have minuscule impact on the indexes initially. They will have a big impact if they can maintain share price in the first ranking/reconstitution after the lockup period expires.
I'd like to know how the CRSP/Morningstar folks feel about the interesting lock-up period rules that Elon has inserted into the SpaceX IPO and how that jives with their analysis.
This particular one, the CRSP total market - which Vanguard uses for VTI - has a “modern” methodology that is thought to be very good. Once every three months they re-rank the entire market and assign weights based on the market as of a particular point in time. Then, a randomly-chosen number of days later, the fund (Vanguard) begins a weeklong reconstitution process in which they buy and sell stocks to reflect the new weights. It is intentionally a weeklong process so that the market is setting prices and not Vanguard with the size of their orders.
The lockup expiry happens, the market reacts, the market is re-weighted, the index reconstitutes. In that order. The price of the stock has to survive the increased float to force the index fund to buy lots more shares.
CRSP has recently changed their rules:
> CRSP indexes were also recently changed to better accommodate fast entry. New IPOs are eligible for CRSP's suite of indexes after five trading days, provided they pass the index's eligibility and investability screens. Previously, these screens included having at least 10% of shares qualifying as freely tradeable (known as float shares outstanding, or FSO). However, in April the methodology changed to allow stocks with either 10% FSO or approximately $3.3 billion in float-adjusted market capitalization to be eligible for index inclusion. The weighting of stocks in CRSP indexes is also based on free float, which should help address the investability challenges associated with thinly traded stocks.
* https://www.schwab.com/learn/story/some-indexes-accelerate-e...
Official justification, and other changes besides timeframe, e.g.:
> First, eligibility and company size. As multi‑class share structures have become more common, we now consider both listed and unlisted shares when determining eligibility and ranking. This allows the index to reflect a company's full economic size, while index weighting remains based solely on listed shares. This change affects who qualifies for inclusion, not how constituents are weighted.
* https://www.nasdaq.com/newsroom/nasdaq100-index-methodology-...
> A new method to calculate the market capitalization of companies to determine their eligibility for inclusion in the index. It involves adding listed stock and unlisted shares that are part of different share classes. Scrapping a rule that requires companies to float a minimum 10% of their shares. Companies with a low float will receive a lower weighting on the index. […]
* https://www.reuters.com/business/new-nasdaq-rules-include-fa...
What they might do is trade bespoke instruments like a credit default swap on datacenter construction deals. Stays underneath the radar of politicians and tech insiders who are invested in a particular outcome.
I know SpaceX, Anthropic, and OpenAI will probably be a drop in the bucket in terms of scale of these funds, (free float % etc). But, is it realistic to take the money out of index funds for a bit until the price of these new stocks come crashing eventually?
Likely the government would step in and inject cash directly into the markets to support them in such a scenario, because a broad-index stock market crash is the modern-day bank run. Retirees carry the bulk of their savings in the form of stocks; if it disappears, we'd likely face revolt.
Pretty sure most people just sit in the default requirement 20XX year funds, which heavily weight away from equities once people are retirement age.
In any case, I’m not sure that large enough numbers of ETF holders are sitting close enough “to the button” to hit sell in the event of a sharp downturn occurring over the space of even a week or two. And a lot of them would see it as an opportunity to DCA into the dip anyway.
However, most ETFs are also setup such that they can create or destroy shares in response to large shifts in demand. In this case, if enough people hit sell, the ETF itself will buy back shares and use the proceeds to sell the underlying assets, in a transaction that mechanically should be market-neutral and just propagate the supply/demand of the fund down to the individual stocks.
With Vanguard specifically, it's even more complicated, because VTI is not a separate ETF. It's a share class of the Vanguard Total Stock Market Index Fund. But the mechanism is largely the same - it has the same Authorized Participant system to mint new shares in case of high demand and redeem shares if everybody sells, and then passes these requests on to the underlying mutual fund, which can then piggyback on some of the tax efficiency benefits of the ETF.
The bottom is going to fall out of the market and it's going to take years to recover, I don't see any reason to suffer through that (and neither do my retirement-age relatives).
I'm after steady gains in an approximately efficient market, not a wildly unsustainable speculative boondoggle, thanks.
Somebody is going to have to explain the business case for Micron trading like it’s Google. We all know that fabs are a low-margin capital intensive business, right?
If they really are a scam, their value will drop and they will be kicked out of the index. I still don’t understand how this means people will be “holding the bag”.
Additionally if you really believe that they are a scam and their price will fall you can just short the stock to completely neutralize their effect on your 401k.
Shorting (itself being a bad idea for regular investors) also breaks the mantra of passive investing, 401k or otherwise. It’s almost impossible to short right after IPO because of low float and high margin risk.
These mega IPOs are just using passive investors as backstop.
The extremely small float of these offerings will make index weights a rounding error.
Ask your LLM of choice to compare the likely value of shares to be held by index funds with the market cap of each of these companies.
Diversification doesn’t work if you throw in low quality investments you wouldn’t consider on their own. It just lowers returns.
Yes agreed. Coding is a pretty big industry though in and of itself. Same with healthcare, legal, etc etc etc. Of course we have zero model today that can seriously kill an industry, but if you look at (1) how good things are today (insanely fast and rapid adoption) and (2) robust performance trends from many complimentary sources, it's kind of inevitable and I haven't really heard a coherent steel man argument for why "killing whole industries" is somehow a far-fetched idea.
> still not profitable enough to make up for the costs of either training or the investments gifted away until it became profitable.
Regardless of the weeds of the economics today, you have a clearly valuable asset that at the very least already a must-have for enterprise and will become even more essential over time. There is token economics that either already do or will make sense. You will have some sort of marginal cost + profit margin that things will stabilize at. You can pay a premium for high quality frontier models. "But it costs more in R&D to fund this!" ok but then token costs will increase. Why is this some sort of death knell?
They don't only require "good enough to kill industries" (which is doubtful but certainly feasible), that's just step one. I think about it in terms of potential failure modes:
- if models don't reach worker-substitution levels, they fail
- if models reach that level, but it's too expensive to run and a worker's still cheaper, they fail
- if models reach that level, but the resulting tech is cheap enough to use, they fail (since open models can compete)
- If the models work but there's social rejection leading to regulation (due to mass unemployment for example), they fail
- if the models work but there are significant deal breakers (like a fundamental inability to keep them safeish to use) they fail.
So it's not really a single AI killer reason, it's more that the success case requires things to land in a very specific future where models work, and they're cheap enough, and expensive enough, and valuable enough, and exclusive enough, and safe enough, and...
Each "and" is a multiplier reducing their chances, and there's a ton or factors. Not imposible, but not where I'd put my money.
This also negates this whole like “you have to completely replace a human” fallacy. Why do you need to replace a human? Why not just increase the value each human brings you?
The model of open weights has been around for awhile. You have frontier labs releasing them. They are powerful and capable and track yet lag frontier models. Without massive government subsidies from probably China who did something similar with manufacturing I don’t get the idea of OSS somehow toppling the entire industry of frontier models. How would this happen? Did demand for frontier models drop after GPT-4? GPT-5? Because the cost of GPT-4 perf is maybe 100x cheaper today. You can always pay a premium for a better model (more data spend with proprietary data sources, more compute for training, more thinking budgets), and in the end, things will either go to a monopoly or prices will stabilize around the marginal costs.
Also safeguards are always important. They are thorny fundamental horrific problems and I can tell you there will be a hellscape of pain as people figure out the trivial ways to do bad things with some of the worst security practices we’ve seen. But I don’t get why this is a dealbreaker, we are using these systems everywhere and in loads bearing environments, today, and reliability and hallucination rates continue to increase / decrease.
0.15B is the full actively employed population of the US. 0.2 extra for the full EU, and we're barely making a third of the needed numbers, and this is assuming that the guy cleaning the street or the plumber will have a 100 bucks subscription just because - not to mention that a hundred bucks is 10-20% of median monthly income in many countries, even some EU ones.
You're asking for 3x Netflix subscribers at 4-10x Netflix price and with the whole world standardized at American prices (without American income).
Then add that this would very likely be a commodity market with competitors, so the billion, if existing, would be a market rather than a specific company's income.
So what could happen, any number of things. An obvious near term issue might be inflation increases dramatically in the US (on account of the oil shock), causing interest rates to increase - maybe dramatically - , which causes the stock market to retract. Also, the housing market is pretty much toast at the moment and an increase in interest rates might finish it off too causing a contraction there. So many ways things can break.
But honestly, I'll tell you after it happens and it will happen. Having lived through a few of these now when everyone tells you it's a sure thing and prices go up for ever you get an inkling you are near the pop.
Yes sure, but that statement contains zero information -- why do you believe it will end in a time short enough for the "market bubble" comments to even make sense?
External shocks -- sure of course. Inflation problems in US -- absolutely, it's a ticking time bomb with a debt crisis looming. Housing market I don't really know anything about but I'll take your word for it.
But all of this has been true for awhile, and could have been stated with equal veracity over the course of the last 5 years at least. Your beliefs shape your actions; so why does this belief shape actions any differently than it has earlier?
> ut honestly, I'll tell you after it happens and it will happen. Having lived through a few of these now when everyone tells you it's a sure thing and prices go up for ever you get an inkling you are near the pop.
Again totally true, I have also lived through them and expect more. But "these companies are IPO'ing because they know the market will pop" is kind of the thing that I was trying to address. For all the signals of market danger, there are plenty of optimistic signals all over the data. Growth is pretty robust across all sectors today.
The reason you are seeing a boom in IPOs versus 2023-25 is because a large portion of funds that are from the 2016-20 vintage are about to hit the 10 year mark when LPs need to be made whole.
This means you need to exit your investments either with an additional round, an acquisition, or (the most common approach for growth equity which is what series D and later rounds are) IPO.
[1] https://www.wheresyoured.at/anthropics-profitability-swindle...
This is just to pump their numbers for the IPO, profitability is nowhere close until we see the real numbers.
[1]: https://www.sec.gov/Archives/edgar/data/1181412/000162828026...
The bubble won't pop until these retirement accounts of have been raided.
NASDAQ changed its rules. Which I’m now 90% sure was a brilliant marketing move, given nobody followed that index until they did this.
In addition to the IPO, I expect there will be a lot of option and derivative services
365day lockup isn’t a universal standard. For example for SpaceX 20% of insider shares can be sold in the first few days. 100% within the first 3 months.
Without a public S-1 filing we don’t know what the lockup for Anthropic will be
https://www.fool.com/investing/2026/05/29/spacexs-massive-ip...
Just because it's a bubble doesn't mean money can't be made.
If you're worried it and the risk involved, perhaps go from 100% equities (100/0) to an allocation that has some bonds (90/10, 80/20, etc). Rebalance as things get out of whack.
There are products that do this rebalancing for you: target-date funds that increase bond allocation as you get closer to retirement, or fixed-allocation all-in-one funds (VASGX, VSMGX; CA: VEQT/XEQT).
Having some bonds and rebalancing would have saved US domestic investors in the so-called Lost Decade of the '00s:
* https://www.forbes.com/sites/advisor/2010/09/13/its-not-real...
Bonds are a bad idea until they're not… at which point it may be too late to buy them.
And you (generally) don't buy bonds for returns (at least not since the '80s). If you can sleep at night with the gyrations of The Market™ then go ahead and skip them, but also keep your timelines in mind (are you hoping to retire in 5-10 years, or make some other use of the money (downpayment)?).
SpaceX AI segment lost about $2.5B from operations in Q1 2026 on $818M revenue...they are burning dollars. Musk controls about 85% of voting power through supervoting shares, and cannot be fired...go IPO buyers...nothing like economic exposure without control....
Even SpaceX is not profitable because of Starship.
Typically I just have my 401k in an index fund so that things have to become established before they're added. This seems like it's circumventing that, and I would be inclined to vote with my wallet. But everything around 401k index funds that I see are very opaque, so it's not totally clear to me how I would avoid this if I wanted to.
Vanguard offers a bunch of ETFs so I can't exactly give you a solid answer.
One of their specific etfs (VTI) tracks the CRSP US Total Market index [1] which has its methodology described here [2] and looking at the "CRSP INVESTABILITY SCREEN SUMMARY" it sounds to me like SpaceX would be added to VTI after 5 days ("Seasoning of New Securities - 5 days or greater if satisfying the fast-track IPO rules".
[1]: "The Fund employs an indexing investment approach designed to track the performance of the CRSP US Total Market Index (the “Target Index”), which represents 100% of the investable U.S. stock market," https://personal1.vanguard.com/pub/Pdf/sp970.pdf
[2]: https://www.crsp.org/wp-content/uploads/guides/CRSP_Market_I...
- S&P 500 Ex-Technology ETF (Ticker: SPXT)
- S&P 500 Equal Weight ETF (Ticker: RSP)
- Vanguard Value Index (Ticker: VTV)
- Vanguard Total Stock Market ETF (Ticker: VTI)
- Vanguard High Dividend Yield ETF (Ticker: VYM)
- Schwab US Dividend Equity (Ticker: SCHD)
- Invesco S&P SmallCap 600 Revenue ETF (Ticker: RWJ)
But I would strongly advise you to NOT DO THIS.
The above position makes it explicit that your thesis involves shorting a stock that could go through the roof in value. That emphasizes what a risk you're taking with your thesis. If your typical investment approach is to just buy index funds, then carry on just buying index funds and let the market do its work.
By the way, if SpaceX, Anthropic, OpenAI etc were to be excluded from the indices, then professional investors would just start a trade the inverse of the one I outlined above - i.e. they'd start shorting your index fund to the extent it was underweight in those companies, in order to profit off the exclusion of those tickers from it.
If you're in this for the long term (which I assume you are given this is your 401k), don't try to second-guess the market short-term.
Also, consumer staples are known for holding their ground during downturns.
But the general advice given is to accept that you probably can't beat the market so don't overthink it and just own the whole thing.
Also keep an eye on expense ratios. A lot of 401k providers gouge you on anything but the basic funds. So you'd have to beat the market by that much more.
What? In what way would the change? They are already raising prices..
The real competition is coming out of China right now and I doubt the Chinese government is going to let them buy out their "fast follower" AI companies that are consistently 6-12 months behind in terms of quality. That said, I'm factoring quality as in Opus 4.5/Sonnet 4.5/GPT-5.5 as break points since I haven't really seen an improvement since that point when using AI.
A company consumed half a billion dollars worth of tokens in a month and nobody noticed anything until the bill came due.
Tha $500m dollars is roughly equivalent to 2000 people working for a year or 500 people working for four years, they can and would accomplish a lot if they worked in companies that add value to the economy by solving real problems.
Marketing only takes you so far in creating noise.
Its weird seeing this focus on bench marks again - PC's did this for quite some time. But in the end it came down to - what does all this additional horsepower let you do? Oh create interesting apps, multi-tasking etc. Which was really the value-add.
I'm responsible for AI roll out at a small business and we've had data science go over these things internally in terms of what results we get for 12+ months now. Its just my experience that is roughly the results we've seen using Deepseek, etc. and comparing cost/results vs. Anthropic/ChatGPT.
> A company consumed half a billion dollars worth of tokens in a month and nobody noticed anything until the bill came due.
It was sourced from one anonymous source. Its highly unlikely to be true in my view, but hey, you do you.
I wouldn't be one bit surprised if a rash of digital sovereignty movements in the near future hamper Chinese model adoption.
The downside of course, is that it is much much harder to go back to chopping wood once that furniture is all gone. Especially if all you ever knew was burning furniture.
https://www.anthropic.com/research/2028-ai-leadership
They are already starting that now.
How much bigger can they get when they’re already 1/5 the size of the world’s largest company?
It seems like the chance of retail making a killing on these IPOs like they did with Amazon (+2200x since IPO) or Nvidia are slim. The entire S&P is $60T.
We don’t actually know if their business model is sustainable. If they were public we would have a better answer to this.
Sometimes I think that the endless cynicism around corporations that exists online is the real ploy by capitalists to keep people poor. It seems to be pretty damn effective at making people allergic to claiming their slice of the pie.
- ABNB right at around their IPO price. - Uber is 75% up… after 6 years. - SNOW came back to break even only after the recent surge.
Please have it all, as long as don’t force my passive investments to be part of it.
Crowdstrike up 1067% Cloudflare up 1408% Robinhood up 148%
For an index fund, I would take a break even or even a slight loss on AirBnb to get those Crowdstrike and Cloudflare returns. I do agree with the overall sentiment that the foundation AI companies are overvalued but the whole point of an index fund is not have to analyze each individual company.
Jeeze 8500 employees. Even then though.
Going public used to mean selling a portion of your company for the capital required to grow. Ideally John Q. Public buys stock, the company grows, and they can sell the stock for more money.
These companies already have the capital required to grow from private investment, and already grew; they're behemoths. The act of "going public" are those private investors using the public market to cash out their investment. The exponential growth the public buyers are expecting to see has most likely already happened.
Of course IIRC they looking into tweaking the rules to allow some handpicked extremely unprofitable companies in, due to "reasons"....
Index funds all make active choices and often hold companies not in the original index. They are more passive than a traditional funds that buys and sells all the time, but they still make active choices. When an index changes stocks they can look up the price - but the funds mirroring the index need to make real trades that if not carefully done will change the value of the stocks (and cause the fund to under perform the index), so index funds have plans to prevent this. Compared to a traditional fund an index fund looks passive and there is much much less for the manager to do - but that doesn't mean the managers do nothing.
Plus as insider lockup periods expire, that's a ton of dollars pulled out of the market and into safer assets. It's going to be a huge net exit of capital.
I'd expect a lot of volatility and pretty heavy downward pressure across the rest of tech.
The contents themselves contain a lot of detailed information about the internals of the company including financials, revenue, ownership details etc... those details are what's confidential until the SEC gives its approval, at which point the public can then review the document.
Welcome to 2012 [1].
[1] https://en.wikipedia.org/wiki/Form_S-1#:~:text=Under%20the%2...
You probably also believe the markets are fully efficient and there is no insider trading ever.
Historically, it takes 6-12 months for the wider public market to determine the correct valuation.
That's why SpaceX, Anthropic, OpenAI are rushing to 15 days.
They know something bad will happen between 15 days and 6 months after IPO.
As opposed to normal people trying to pick winning stocks?
* https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street
Most stocks suck:
> We study long-run shareholder outcomes for over 64,000 global common stocks during the January 1990 to December 2020 period. We document that the majority, 55.2% of U.S. stocks and 57.4% of non-U.S. stocks, underperform one-month U.S. Treasury bills in terms of compound returns over the full sample. Focusing on aggregate shareholder outcomes, we find that the top-performing 2.4% of firms account for all of the $US 75.7 trillion in net global stock market wealth creation from 1990 to December 2020. Outside the US, 1.41% of firms account for the $US 30.7 trillion in net wealth creation.
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3710251
> Four out of every seven common stocks that have appeared in the CRSP database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills. These results highlight the important role of positive skewness in the distribution of individual stock returns, attributable both to skewness in monthly returns and to the effects of compounding. The results help to explain why poorly-diversified active strategies most often underperform market averages.
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447
Further, over ten years, most individual stocks under perform a market index (even more so if stock was initially a top performer):
> […] Since 1926, the median ten-year return on individual U.S. stocks relative to the broad equity market is –7.9%, underperforming by 0.82% per year. For stocks that have been among the top 20% performers over the previous five years, the median ten-year market-adjusted return falls to –17.8%, underperforming by 1.94% per year. Since the end of World War II, the median ten-year market-adjusted return of recent winners has been negative for 93% of the time. The case for diversifying concentrated positions in individual stocks, particularly in recent market winners, is even stronger than most investors realize.
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4541122
Even with all these shenanigans, most people are better off sticking with index funds.
Past history cannot tell what happens next.
This sort of logic reminds me how people like to say things like "Everyone thinks they're an above average driver". Yes, it might be true that many 80% of people think they're above the median skill, but that doesn't mean there aren't actual above average drivers out there.
An observation form Nick Maggiulli:
> Instead, I am going to argue that you shouldn’t pick stocks because of the existential dilemma of doing so. The existential dilemma is simple—how do you know if you are good at picking individual stocks? In most domains, the amount of time it takes to judge whether someone has skill in that domain is relatively short.
> For example, any competent basketball coach could tell you whether someone was skilled at shooting within the course of 10 minutes. Yes, it’s possible to get lucky and make a bunch of shots early on, but eventually they will trend toward their actual shooting percentage. The same is true in a technical field like computer programming. Within a short period of time, a good programmer would be able to tell if someone doesn’t know what they are talking about.*
[…]
> But, what about stock picking? How long would it take to determine if someone is a good stock picker?
> An hour? A week? A year?
> Try multiple years, and even then you still may not know for sure. The issue is that causality is harder to determine with stock picking than with other domains. When you shoot a basketball or write a computer program, the result comes immediately* after the action. The ball goes in the hoop or it doesn’t. The program runs correctly or it doesn’t.* But, with stock picking, you make a decision now and have to wait for it to pay off. The feedback loop can take years.
> And the payoff you do eventually get has to be compared to the payoff of buying an index fund like the S&P 500. So, even if you make money on absolute terms, you can still lose money on relative terms.
> More importantly though, the result that you get from that decision may have nothing to do with why you made it in the first place. For example, imagine you bought GameStop in late 2020 because you believed that the price would increase as a result of the company improving its operations. Well, 2021 comes along and the price of GameStop surges due to the wallstreetbets inspired short squeeze. You received a positive result that had nothing to do with your original thesis.
[…]
> This is the existential crisis that I am talking about. Why would you want to play a game (or make a career) out of something that you can’t prove that you are good at? If you are doing it for fun, that’s fine. Take a small portion of your money and have at it. But, for those that aren’t doing it for fun, why spend so much time on something where your skill is so hard to measure?
[…]
> I know I won’t convince every stock picker to change their ways, and that’s a good thing. We need people to keep analyzing companies and deploying their capital accordingly. However, if you are on the fence about it, this is your wake up call. Don’t keep playing a game with so much luck involved. Life already has enough luck as it is.
* https://ofdollarsanddata.com/why-you-shouldnt-pick-individua...
Some index funds have a very long horizon before they include them (e.g. a year). Others are "fast-tracked" (e.g. notably VTI). Most of those, however, are float-adjusted, so only the stock available for trade is considered part of the marketcap. So e.g. VTI / VTSAX will buy spacex relatively quickly after the IPO but at the float-adjusted weight of ~$75B because that's the % of stock available.
If you care alot about this, now is the time to understand how your index fund treats IPOs wrt to delays + float adjustment.
Specifically, I do a typical 3FP and own VTSAX, but I don't read bogleheads or anything. True set-it-and-forget-it, but I do want to read more if things are shifting.
VTSAX (and VTI) follow the CRSP index. This is float-adjusted but they likely will be fast tracked (these are two separate rules in how this index chooses to weight things and participate in new stocks). At ~5% float, these companies will be in the 50-100B range. So under all those assumptions, they'll be bought quickly but represent less than 1% of VTSAX (until they float more shares on the public market).
https://www.multpl.com/shiller-pe
Valuations are literally at 1999 levels, and that's before the coming IPOs. No wonder they chose this moment to IPO.
Wikipedia states most capital in the late 1800s railroad bubble in the USA was "involved in projects offering no immediate or early returns" https://en.wikipedia.org/wiki/Panic_of_1873
Price setting.
Also filing an S-1 doesn't actually indicate that they intend to go public "immediately," it just gives them the option to go public (probably in the near future).
Would it crash other company stocks so that investors start selling and purchasing Anthropic shares, or how does it work?
AI real expectations are about as frothy as they'll ever be.
The latest models have legitimately taken senior coders from execution to agentic babysitting mode - something that was only a dream until last time.
There's a rumor of a $500M MONTHLY Anthropic Bill - that is the equivalent total compensation of 10-15 THOUSAND senior ICs (L5, L6). Imagine what kind of company can spend that amount and pay their staff and somehow 'see value'
The indexing argument is overblown. How many companies of the S&P could the average commenter here name? My guess is - charitably - 30. Yes, weighting, etc. but every indexer here is buying in hundreds of companies they have no idea about the business of, and all of a sudden some percentage goes to a tech company they know about and they want to comment.
Let these people run their victory lap!
Better to do it now than to wait a day longer and the tokens are not getting any cheaper here.
Obviously OpenAI will file for IPO certainly this month, or even this week in response both SpaceX, and Anthropic.
Then AGI will then have been achieved externally.
The document itself is what's confidential until the SEC approves it, at which point Anthropic will release that document to the public and IPO.
I do think Anthropic's business has very good long-term prospects, but the current run rates are not sustainable and they know it which is why they, more than OpenAI, are under higher pressure to IPO. Some things to consider:
1. This was surprising to me, but enterprises Claude Code (and Codex) plans are billed on token usage at API rates. I was expecting lower rates for volume subscriptions. This explains their huge spike in ARR, but I expect competitive pressures will soon come into play, especially as companies start to get more budget-conscious. Specifically...
2. Tokenmaxxing is finally encountering the inevitable pushback. My theory is it was an effort to incentivize devs to experiment and figure out ways to get productive with AI by throwing money at the problem, which was always going to be a short-term dynamic. Companies are going to be much more intentional about token budgets (especially as Anthropic is apparently now asking for volume commitments for enterprise plans.) Smaller, open-weight models may start looking much more attractive.
3. I've said before but I think Anthropic severely underestimated their own popularity and corresponding demand for compute and has to enter costly deals to acquire capacity to keep Claude's 9's above GitHub's, even as they alienated customers with short term tweaks to optimize usage. These deals will eat into their margins and Claude's problems likely pushed customers to competitors, the effects of which could take time to be more evident.
So maybe whatever looks good on their financials right now is time-limited, and the current boost may start petering out at some point, which may influence when OpenAI files their own IPO.
actual consultation link
I just hope pension funds and other long-term investors don’t end up buying into them.
"The stock market just did something eerily similar to the dot-com bubble top in 2000" - https://www.cnbc.com/2026/06/01/the-stock-market-just-did-so...
I've seen this comment on HN at least 5 times already.
And you can consistently beat the market as long as passive index investors believe in efficient markets.
post your position for all to see if you're so confident. Time in market is way better than timing the market. I'd rather ride through a downturn, buying at the same pace i always do, and come out the other side than try to time it. Been there done that and i got burned every time.
It's just a standard/template that most companies reuse.
https://www.figma.com/blog/s1-confidential-submission
https://www.prnewswire.com/news-releases/gemini-announces-co...
https://investors.navan.com/news-releases/news-release-detai...
https://www.round1-group.co.jp/docs/pdf/2026/20260507_news_e...
It's a required public disclosure following a format traditionally used in mandatory public disclosures.
It’s a classic tactic. If you are unable to show real data (why?), then just give as little information as possible so that people can just fill in the gaps based on their own biases.
I mean, look at the way Mythos was announced…too dangerous to release outside of select customers, but they’ve announced they’re adding Mythos capabilities now, so I guess the danger has passed? What changed? What risk mitigations have taken place?