It’s widely rumored that both OpenAI and Anthropic will go public within the next year or so, triggering massive capital inflows. I think this unleashes an underrated financial dynamics.
An optimal portfolio hedges your personal risks. Unless you’re independently wealthy, the risk of job loss due to AI automation is one your largest personal financial risks, and it makes a lot of sense to buy insurance against that (i.e., to buy into AI companies). Right now, individual investors can’t do that. And the investors that have access to OpenAI/Anthropic on the private market are precisely the ones that don’t need to hedge that risk. Once you open up to retail, a rational investor should park a sizable percentage of their net worth in those shares, opening up a capital gusher.
This is especially true for Anthropic—there’s basically no way for a retail investor to get meaningful Anthropic exposure if they want it. It’s a little different for OpenAI given that SoftBank is kinda an OpenAI proxy at this point (albeit in ways that make it a less attractive investment than the real thing).
Seems like this could lead to substantial acceleration of progress. It may also change the politics. If stopping AI progress mostly means financially soaking billionaires, then it’s politically a lot more palatable than if it will also screw up the 401ks of the mass affluent.
I suppose it depends on exactly what you do, but if the threat to you is something along the lines of “AI broadly replaces white collar workers” then it’s very hard to come up with a scenario where AI can replace most white collar workers but can’t find a way to make money for the companies building it.
You have to tell a really contorted story for that work—I guess it’s “believable” to imagine something like: AI gets good enough to replace most white collar workers, but there’s such intense commoditization and competition that there is no pricing power so the companies make no money, and the one white collar thing that AI can’t do is design semiconductors, so all the economic gains flow to Nvidia. Could happen but you have to rig the assumptions to get that result. And aside from that, most of the forms I can come up with are of the “money won’t matter anymore” variety in which case, there is no financial hedge.
The point I’m trying to make is that Anthropic shares are worth more to your average upper middle class white collar worker than they are to the current ultra-wealthy or institutional shareholders. So, let’s assume Anthropic is currently valued in a way that perfectly captures it’s future growth prospects, it should still IPO at a higher valuation (and raise tons of money in the process) because retail investors will rationally put a higher value on the stock than institutions given that it is useful to retail but not institutions as a hedge.
I’m sure institutional shareholders, to the extent they can, are doing some amount of arbitrage in expectation of that dynamic. Everyone knows retail is desperate to buy AI. So, maybe, a fair secondary market valuation of Anthropic already accounts for that premium multiplied by some assessment of the probability they’ll actually list.
But, either way, the point is that the average company is worth about the same to retail vs. institutional investors, and AI companies have very different valuations for those two groups.