The AI IPO wave is about to test Wall Street’s appetite

The AI IPO rush is here. With Open AI’s announcement late Monday that it had confidentially filed for an IPO, the three biggest AI companies are all in line to go public. (And a fourth, Perplexity, will likely bring up the rear in 2028.) It’s something that has been looming for a long while on Wall Street. Now, though, investors will have to decide if the era of the Mega-IPOs is too much of a good thing. Space X is asking Wall Street for about $75 billion. Anthropic and Open AI may seek a bit less, but it still will almost certainly be well over the current all-time high (Alibaba set that in 2014, with a $22 billion raise). Perplexity, whose CEO told CNBC Monday that it was planning to IPO in 2028, is a wild card. That’s a lot of money, regardless of whether it’s coming from institutional or retail investors. And it could add up to a make-or-break moment for both the industry and possibly the economy. The bull case The revenue growth at companies like OpenAI and Anthropic has been unlike anything investors have ever seen. SpaceX has built a solid business in the rocket field and is betting heavily that it can make xAI an even bigger part of its business. The company is actively developing a large-scale collection of AI data centers in space, which could help it achieve that goal, should it succeed. Investors might be willing to overlook losses of all of these companies now and bet instead on the potential of these companies. If AI takes off like OpenAI CEO Sam Altman and other executives envision, some or all of these companies stand to grow exponentially and their stock is likely to follow. The IPOs of these companies will create thousands of new millionaires and more than a few billionaires out of long-time employees. Investors are hopeful they’ll join those ranks as AI companies grow. To be sure, AI has already helped drive valuations for both the S&P 500 and tech stocks within that index above the historical average. And governments ar