Three's a crowd

If you’ve been living unplugged (in which case, good for you), let us remind you that the market is staring down three monster IPOs: SpaceX, targeting a $1.75 trillion valuation, is set to debut this Friday, while Anthropic confidentially filed for an IPO last week, reportedly targeting a $1 trillion valuation. Not to be outdone, just yesterday OpenAI also confidentially filed to go public. Here’s what we know about OpenAI’s bid:

• OpenAI did not disclose the size or terms of the offering, and didn’t lay out a timeline for listing in the stock market. Reuters reported that the company is eyeing a valuation of up to $1 trillion.
• OpenAI’s venture capital investors are set for the biggest windfall. Those big winners include Khosla Ventures, Microsoft, and Andreessen Horowitz.

Now that Anthropic, OpenAI, and SpaceX are all approaching the starting gate, the $3.6 trillion question remains: Is there room in the market for not one—not two—but three blockbuster IPOs?

Ready, set, trade: The first to list will soak up a significant portion of the demand from both frantic retail investors and deep-pocketed institutional investors. Meaning most analysts think the market can handle the SpaceX IPO, according to the New York Times. But two other rival AI giants debuting the same year leaves little room for error as they court investors. After all, both institutional investors and retail traders have finite capital to deploy and concentration limits to respect.

Heated rivalry

Between Anthropic and OpenAI, it’s tempting to focus on whose logo is superior (Claude, obviously). But investing is based on balance sheets, and the metrics that matter are revenue and net profit, according to Pitchbook VC analyst Emily Zheng.

Except that right now, Anthropic and OpenAI are both on track to lose billions of dollars. In fact, according to the Wall Street Journal, OpenAI is set to burn more cash than any other company…ever. Anthropic’s financials look slightly more solid: The company is reportedly headed for its first profitable month in June—a milestone that OpenAI is far from—and has taken a big slice of the enterprise market. OpenAI, meanwhile, is seen by some as a “retail meme trade,” Breakout Point Managing Director Ivan Cosovic told Dealbook. But given how quickly these companies can swap pole position, that dynamic could flip yet again.

It’s also bigger than Sam vs. Dario: If one debut fails to meet expectations, it fuels ominous bubble allegations for the whole market.

Keep in mind: Historically, investors who get the offer price do see higher returns, according to data from the Wall Street Journal. But that doesn’t mean you have to rush to invest if you have a long-term horizon: “It’s important to realize there’s typically a six-month lockup period before existing investors can sell their shares,” Zheng said in an interview late last month. “So I’m usually looking at how the stock price performs after that period as well, because I think that’s a better determinant of investor conviction and long-term share price performance.”

There’s only one way to find out: The starting pistol fires Friday as SpaceX goes public.—LB