The hard part is about to begin for the world’s biggest AI companies

Prominent players in the artificial intelligence sector, including OpenAI, Anthropic, and SpaceX, are gearing up to face a new challenge: the scrutiny of Wall Street. OpenAI, known for its ChatGPT technology, has recently announced intentions to go public, following Anthropic's confidential IPO filing just last week. SpaceX, which encompasses Elon Musk's AI venture xAI, is also set to make its market debut soon. These public offerings are poised to offer a revealing glimpse into the AI market's current state, with potential stock sales reaching into the hundreds of billions. However, the shift to public ownership means that these companies, whose valuations are nearing the trillion-dollar mark, will come under intense scrutiny as investors expect remarkable growth every quarter. According to Nigel Green, CEO of deVere Group, the expectations placed on companies by public markets can be unrelenting. He noted in a recent email, "Expectations that seem manageable in private markets can become relentless under the glare of public ownership." Wall Street's appetite for AI growth is insatiable, with companies like Broadcom experiencing a staggering revenue increase but still facing investor disappointment. Despite reporting a remarkable 48% revenue growth in the second quarter, Broadcom's shares plummeted over 13% last week, marking its worst performance since September 2024. The decline in AI chip stocks contributed to a broader downturn, with the Nasdaq experiencing three consecutive days of losses. Even Nvidia, the leading AI chip manufacturer, has not been immune from investor scrutiny, losing $600 billion in market value in a single day earlier this year. As OpenAI and Anthropic prepare for their public offerings, they will be held to similar standards, with investors keen to see solid financial backing for their substantial investments in AI infrastructure. Both companies have shared promising growth indicators. OpenAI recently announced a $122 billion capital raise, boosting its valuation to $852 billion, and reported a monthly revenue of $2 billion—up from $1 billion per quarter. ChatGPT also achieved a remarkable milestone, becoming the fastest app to reach one billion users in just three years, as noted by analytics firm Sensor Tower. Anthropic's valuation surged from $380 billion in February to $965 billion in May, surpassing OpenAI at that time. The company reported a run-rate revenue of $47 billion, indicating strong financial health. The upcoming IPOs suggest that OpenAI and Anthropic are confident in their trajectories toward profitability. However, they will likely face rigorous questioning from analysts about their future growth strategies, product releases, and financial performance during earnings calls. Private investors might be more patient, but public markets demand immediate results, with less tolerance for delays or missteps.