As AI companies race to go public, who else is along for the ride?

The world of artificial intelligence is buzzing, not just with new technological breakthroughs, but with a palpable excitement on Wall Street. AI companies are in a clear race to go public, and many are looking to "ride that SpaceX IPO wave" – a phrase that captures the ambition and sky-high valuations seen in recent market debuts. This trend marks a significant moment for the AI industry, shifting focus from pure innovation to demonstrating sustainable business models and profitability in the public eye.

The AI Gold Rush: A Market Transformed

The global artificial intelligence market is experiencing explosive growth. Valued at an estimated $390.9 billion in 2025, it's projected to soar to $3,497.3 billion by 2033, growing at a compound annual growth rate (CAGR) of 30.6% from 2026 to 2033. Other projections are even more optimistic, with one estimate placing the global AI market size at $5.26 trillion by 2035, growing at a CAGR of 30.84% from its current $273.6 billion. This impressive expansion is fueled by the rapid adoption of generative and agentic AI across various industries, pushing AI from experimental use to core business infrastructure globally.

Venture capital (VC) funding has mirrored this enthusiasm, with AI startups attracting significant investments. In 2024, AI startups secured approximately $100-130 billion in venture capital, making up about one-third of all global VC dollars. This share jumped even higher in 2025, with AI capturing nearly 50% of global funding, totaling $202.3 billion. This capital isn't just flowing; it's actively being reallocated towards AI, even as overall startup funding to non-AI companies saw a slight decline.

However, this funding isn't evenly distributed. A significant portion of these mega-rounds, often exceeding $100 million, has gone to a handful of foundational model companies like OpenAI and Anthropic. For instance, foundation model companies raised $80 billion in 2025, representing 40% of global AI funding. This concentration means that while the sector as a whole is booming, many smaller AI startups are competing for a smaller piece of the remaining pie, pushing them to seek alternative avenues for growth and liquidity, including public markets.

The "SpaceX IPO Wave" and AI's Public Debut

The "SpaceX IPO wave" is a reference to the recent, highly anticipated, and record-breaking initial public offering of Elon Musk's space exploration company. On June 12, 2026, SpaceX officially began trading on the Nasdaq under the ticker SPCX. The IPO was monumental, selling 555.6 million shares at $135 per share and raising approximately $75 billion, making it the largest IPO in history. This offering valued the company at an astounding $1.77 trillion, placing it among the world's most valuable companies.

What makes this particularly relevant to the AI sector is the inclusion of SpaceX's AI division, xAI, into the public offering. Reports suggest that investors received a "Total SpaceX" IPO that combined its various growth platforms, including Starlink, launch operations, Starship development, and xAI, which encompasses artificial intelligence infrastructure tied to satellite communications and autonomous systems. This integrated approach helps support the enormous valuation by offering investors exposure to multiple high-growth industries simultaneously.

The success of the SpaceX IPO, with shares opening at $150 and climbing to $160.95 by the close of the first day, a gain of 19%, has undoubtedly created a ripple effect across the tech industry. It demonstrates a strong investor appetite for high-growth, transformative technology companies, even those with ambitious, long-term visions.

Major AI Players Eyeing Public Markets

Following SpaceX's lead, other prominent AI companies are making their moves toward public listings. OpenAI, the developer behind ChatGPT, and Anthropic, known for its generative AI breakthroughs, have both confidentially filed for IPOs in June 2026. These filings signal their intent to go public, though the exact timing remains subject to market conditions and regulatory approvals.

OpenAI's potential IPO is particularly significant. Once considered the undisputed leader in the generative AI boom, the company is now facing increasing scrutiny regarding its path to profitability. While OpenAI reported $5.7 billion in Q1 2026 revenue and has a massive user base (905 million weekly active users, 92% Fortune 500 penetration), its adjusted operating margin stood at -122%, indicating significant quarterly losses. This highlights a crucial challenge for AI startups: translating rapid growth and technological prowess into sustainable financial performance in the public markets.

Other highly anticipated AI IPO candidates include Databricks, an enterprise SaaS platform specializing in AI-driven big data analytics, which has raised nearly $14 billion in funding and has been a watched IPO candidate for years. Hugging Face, an open-source AI platform; Cerebras Systems, which designs AI supercomputers; and ThoughtSpot, redefining enterprise data search with AI, are also among the firms expected to attract significant investor interest when they potentially go public.

Investor Sentiment and Evolving Market Dynamics

The current market environment for IPOs, particularly in the tech sector, is showing signs of revival. In 2024, the IPO market experienced an uptick with 76 IPOs raising $15 billion by May, compared to 68 IPOs raising $9 billion in the same period in 2023. This momentum continued into 2025, with increased IPO activity reflecting growing investor confidence, especially in the technology, media, and telecommunications (TMT) sector, propelled by strong interest in AI.

However, investors are also becoming more discerning. The immense capital needed by AI giants like SpaceX and potentially OpenAI and Anthropic raises questions about whether they might "crowd out fast followers" in the public market. There's a clear demand for greater certainty that a business and its financial performance are de-risked, whether through proven profitability, long-term contracts, or a valuation discount compared to public market peers.

AI startups, despite their innovative potential, face several challenges as they consider going public. These include intense competition for computing capacity, navigating complex and shifting privacy and regulatory concerns, and the constant threat from established tech incumbents. Investors are increasingly looking beyond just growth and technical capability, focusing on revenue growth, profit margins, customer retention, and a clear path to profitability.

The shift in investor behavior is evident: rather than spreading capital thinly across numerous ventures, resources are concentrating on fewer, high-potential companies that demonstrate clear traction or have heavy infrastructure needs. This strategic focus allows well-funded firms to dominate their niches, while smaller players might struggle to keep pace.

The Road Ahead for AI IPOs

The outlook for AI IPOs in 2026 and beyond remains favorable, underpinned by a constructive market backdrop and a strong pipeline of potential public offerings. Morgan Stanley predicted that 10 to 15 tech companies would go public in 2025, with many of them focused on AI. The global AI software market alone is forecast to reach $467 billion by 2030, with generative AI being a major growth driver. This sustained growth and the ongoing enterprise adoption of AI will continue to make the sector attractive for public investment.

However, the journey to becoming a successful public company for AI startups involves more than just impressive technology. It requires a robust business model that can withstand market scrutiny, a clear strategy for monetization, and the ability to demonstrate sustainable value creation. The "SpaceX IPO wave" has shown that investors are ready for large, transformative tech offerings, but they also expect a solid foundation and a clear vision for long-term success, especially as AI companies transition from private experimentation to public accountability. The coming years will likely differentiate the AI innovators who can effectively navigate these market demands from those who cannot.

Frequently Asked Questions

What does "riding the SpaceX IPO wave" mean for AI companies?

It refers to AI companies attempting to capitalize on the strong investor enthusiasm and high valuations seen in the recent, record-breaking initial public offering (IPO) of SpaceX. SpaceX's IPO, which included its AI division xAI, demonstrated significant market appetite for transformative tech companies, inspiring other AI startups to consider public listings.

Which major AI companies have recently gone public or are planning to?

SpaceX recently completed a historic IPO on June 12, 2026, which incorporated its AI division, xAI. Additionally, major AI players like OpenAI and Anthropic have confidentially filed for IPOs in June 2026, indicating their intent to go public in the near future. Databricks is another highly anticipated candidate for a public offering.

What are investors looking for in AI companies considering an IPO?

Investors are increasingly looking beyond just technological innovation and growth. They seek clear evidence of a sustainable business model, a strong path to profitability, healthy revenue growth, solid profit margins, and robust customer retention. The sheer computing costs associated with advanced AI models also mean investors are scrutinizing capital efficiency.

What challenges do AI startups face when trying to go public?

AI startups face challenges such as intense competition for computing resources, navigating complex and evolving privacy and regulatory landscapes, and the significant financial demands of training and deploying large AI models. They also need to prove they can differentiate themselves from both other startups and established tech giants, all while demonstrating a clear strategy for commercial viability and long-term value in the public market.