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Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

economist.com

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Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#921

Post by rtkwe »

coredog64 wrote: post #755
hliyan wrote: post #471

Earlier quoted context omitted.

I've been told the following (obviously negative) narrative. Can someone verify/refute some of these? I've put (?) next to questionable claims. 1. Twitter is purchased with debt 2. Debt is transferred to xAI via acquisition of X/Twitter 3. Debt is further transferred to SpaceX via acquisition of xAI 4. SpaceX IPO offered at extreme valuation 5. Index fund inclusion rules waived for SpaceX IPO: profitability requireme…

> Index funds are largely held by passive investors such as pension funds. Pension operators are not typically passive. It's a different story to say that maybe they should be given that their returns don't always match up with index funds.

They still hold a fairly large amount of money in index funds "about 19.2 percent for public pension plans and 11.2 percent for corporate plans" [0 (2015)] That's a significant sum of money that will be forced into purchasing SpaceX well before it normally would be.

[0] https://www.nytimes.com/2015/03/04/business/pension-funds-tr...

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#922

Post by sportsracersss »

Alex-Programs wrote: post #835
oblio wrote: post #427

Earlier quoted context omitted.

SpaceX financials are a mess outside of the actual SpaceX part. xAI is losing money hand over fist, other random bits in there are doing the same. The valuation makes no sense. It's basically a money transfer from the average person to the poor richest person on the planet. The true Great Filter is mental illness, apparently.

XAI is now printing revenue thanks to the Anthropic compute deal. Moreso than SpaceX itself.

They're still deep in the hole because the DCs were built on debt.

The IPO will hand those heavy debt bags to the public.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#923

Post by rconti »

zuzululu wrote: post #412
sinuhe69 wrote: post #397

Earlier quoted context omitted.

The AI market might not collapse but the stock market could! Even if the AI companies only need to downgrade their investments and a healthy correction is underway, a fire sale of AI-related stocks will bring the stock market to its knees.

I don't really see this happening in the way that most people are envisioning. It's clear that Anthropic and OpenAI have found product market fit. They've gotten companies hooked and personally I cannot go back to the old way of coding. However, I do see a bit of reduced demand for hardware and datacenters which could reprice these companies to more sane multiples. There will be winners and losers.

Have you noticed that some % of devs are totally sold on AI, and others less so? I use it all the time, and I'd say my use is declining now after a fair bit of disillusionment.

It's not hard to imagine a world in which:

* Companies realize they're spending too much on AI, and cut back

* AI companies start raising prices

* Companies cut back on AI usage even more to compensate for the higher prices

* Some individual users use less AI, while others continue to increase their usage

The projected figures rely on EVERYTHING continuing to go up, which it doesn't seem to be.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#924

Post by rtkwe »

smugglerFlynn wrote: post #584
iLoveOncall wrote: post #481

Earlier quoted context omitted.

No, it's wrong. Amazon is worth $2.81T right now and only represents 4.03% of the S&P500. So a $1T share would represent less than 2% of the S&P500. This is significant for a single company, and 6% for 3 shit-tier companies (SpaceX, OpenAI and Anthropic) is even more significant, but we're far from "losing retirement if they go bust"-levels.

I wish we would start paying proportional attention to business news, instead of treating AI (or any other "cutting edge") companies as economy-defining and giving these 50+% of the attention. It is especially telling if we try to list out all the psychological biases at play: - Availability & salience bias - vivid, memorable things feel more important than they are - Narrative bias - humans tend to think in stories,…

On the other hand if you remove the gains from AI related companies the bull market basically disappears. [0] It makes up a small part of the market over all but if the market had been trading sideways for 3+ months people would be feeling quite differently about the economy.

[0] https://finance.yahoo.com/markets/article/ai-is-carrying-the...

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#925

Post by brikym »

brikym wrote: post #380
tdeck wrote: post #349

Earlier quoted context omitted.

What can those of us who are passive investors do to protect ourselves?

I asked this the other day. The response was to buy VGT instead of QQQ https://news.ycombinator.com/item?id=48324097#48334357

Seems this advice was wrong as VGT uses an MSCI index which does have fast track entry. Do your own research.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#926

Post by mdnahas »

tananaev wrote: post #785
augstein wrote: post #105

For SpaceX (and possible the others): Yes it can, since they changed the rules to force over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations. From https://x.com/Hedgeye/status/2060435253928604065 : "Rule changes for the SpaceX $SPCX IPO: Index providers waived the profitability requirement and cut the seasoning window from 90 days to 5. This forces over $30 trillion in passive 401k a…

You're misrepresenting things a bit. S&P 500 has not approved those changes yet and they have some other protections as well. Nasdaq and FTSE Russell definitely sold out and should not be trusted as good indexes going forward. Most popular passive indexes are S&P 500 and some total markets. Total index, like the one used by VTI, is likely the best spot in this case. They have not changed any rules, as far as I know.

Vanguard’s VTI uses an index designed by CRSP. I read the rules and, best I can tell, CRSP indices will add the stocks at the next rebalancing in September.

(FWIW, CRSP was run by U of Chicago, but they recently sold it to Morningstar.)

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#927

Post by cloudfudge »

JumpCrisscross wrote: post #93
ravenstine wrote: post #90

All these things are apparently valued at trillions of dollars these days. Where's the trillions, or hundreds of billions worth in improved quality of life? What has gotten better other than the ability to produce more crap?

> Where's the trillions, or hundreds of billions worth in improved quality of life? I think these IPOs are going to mint tens of thousands of new millionaires or something. That, in turn, will generate massive tax windfalls for all levels of government. > other than the ability to produce more crap? This is a big "other than." (And to be clear, the jury is still out on whether AI will let us produce more in the long…

"Tens of thousands of new millionaires" sounds like a disaster tbh.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#928

Post by mdnahas »

hliyan wrote: post #450
freetime2 wrote: post #282

Earlier quoted context omitted.

I don't like this either, but from the article: > Although Nasdaq has already shortened the “seasoning” period before index inclusion to 15 trading days and FTSE Russell has slashed its waiting time to five days (and S&P Dow Jones is reportedly considering something similar), most share indices weight firms in proportion to the value only of shares they have released for public trading (the “free float”). For SpaceX,…

Correct me if I'm wrong, but 0.1% of S&P 500 seems exceedingly huge when you consider how much of the economy is represented in the S&P 500.

To be pedantic, the S&P 500 is a large portion of the stock market, not the economy. Its value is about 75% of the value in stocks. But stocks are only 25% of all stores value. Real estate is twice the size of the stock market. The rest is mostly corporate and govt bonds.

This is why the real estate crash of 2008 caused the Great Recession, while the Internet Bubble bursting was a small recession.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#929

Post by WellCalcs »

hedora wrote: post #214
threetonesun wrote: post #191

Earlier quoted context omitted.

I’d love it if for once someone on here saying LLMs are some life changing apparatus would give a single example.

We have some exotic chicks the kids picked out, and 4 were going to die of brooder pneumonia. An LLM correctly diagnosed it, and figure out that we could treat them with Nutri-drench Sheep Supplement, since Tractor Supply was sold out of the chicken version, and they are very similar. Of course it then immediately recommended we use hemp bedding that would kill them a different way, but the saleswoman sanity checked…

[flagged]

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#930

Post by wrsh07 »

383toast wrote: post #905
wrsh07 wrote: post #862

Earlier quoted context omitted.

Net profit is the wrong metric for high growth companies. You want the unit economics. If the unit economics look great (my understanding is they're at least fine-to-good), then they should not be taking profit because it is very much in their interest to do capex to grow their capacity so that they can continue to grow. It's a knife's edge because if they invest too aggressively it could lead to bankruptcy, but so f…

unit economics aren't great for anthropic are they

What do you think they are, what do you want them to be, and how much revenue and growth do they need before low margins make for a monster of a company?
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