Billionaire Ekman Identified the Main Risk for Investors in the Anthropic and OpenAI IPOs
Companies that go public with a huge valuation leave investors less room to make a profit, according to the businessman
Ekman does not view losses as an obstacle to investment, but wants to see when the business will be able to generate a positive cash flow / Photo: Tada Images / Shutterstock.com
Investors looking to participate in major IPOs should keep in mind that the higher a company’s initial valuation, the fewer opportunities they will have to profit from its future growth, warned billionaire Bill Eckman. At the same time, he believes it is not enough to look solely at a company’s growth prospects—it is important to understand whether they justify the stock price.
“When Amazon went public, its market capitalization was relatively modest, which gave ordinary retail investors a chance to make a fortune. It’s much harder to make a fortune starting from a valuation of one and a half trillion dollars,” Ekman said on the Fortune 500: Titans and Disruptors of Industry podcast.
According to the investor, the space company SpaceX, which held a record-breaking IPO in June and is now valued at $1.7 trillion, is targeting massive markets, occupies a unique position, and has a significant advantage in delivering cargo to orbit. He also praised the Starlink satellite communications business, admitting that he uses it on his fishing trips. And although SpaceX is still somewhat behind in the field of artificial intelligence, Ekman says, the company has one advantage: Elon Musk’s ability to build infrastructure quickly and relatively cheaply.
The next major IPOs could come from artificial intelligence developers Anthropic and OpenAI. Ekman described Anthropic’s growth rate as unprecedented: he said he had never seen a business grow so quickly.
At the same time, OpenAI raises more questions for Ekman. Based on media reports, he says, the company is incurring significant losses and may require tens or even hundreds of billions of dollars in capital over the next few years. Ekman does not view the losses as an obstacle to investment, but he says it must be clear whether the business will be able to generate positive cash flow and when it will begin to do so.
“At certain times, the markets are willing to put up with companies operating at a loss for a long time. But at some point, they may wake up and realize they’re no longer willing to tolerate it. That’s where the risk lies—especially when the amounts involved become very large. That’s exactly the question I have regarding OpenAI. Although, I’ll say it again, I don’t have enough detailed information to judge for sure,” the billionaire said on the podcast.
According to Bloomberg, Anthropic is considering an IPO in October. In May, during its latest funding round, the developer of Claude was valued at $965 billion. Its closest competitor—OpenAI—last reported a valuation of $852 billion. OpenAI had also previously planned to go public in the fall of 2026 but postponed the offering until next year.
This article was AI-translated and verified by a human editor
