Over the weekend, OpenAI CEO Sam Altman said that the company will not go public this year. The delay will in effect give SpaceX (SPCX) a head start.
SpaceX completed its IPO this year to raise $75 billion at a $2 trillion valuation ($135/share). By comparison, OpenAI’s delay adds substantial risks. Market conditions might shift to a downside this year. The Iran war opened to a second front late last week. That pressures oil supply. Higher oil prices would compel bond markets to demand for higher yield amid worsening inflation.
Altman cited a need to slow down development to address AI safety. Although regulators should have the responsibility to set safety, a safer product would help OpenAI. The bad news is that Softbank (SFTBY) might face stock selling pressure. Its Vision Fund holds a 13% ownership in OpenAI.
China will not slow its AI development. It is only a few months behind the top models, including Anthropic and Perplexity. AI enthusiasts should expect that DeepSeek, Qwen from Alibaba (BABA), Moonshot AI, and Kimi K3 might speed up AI development.
Alibaba is an e-commerce-turned AI developer that led a $300 million fund raise round to imply a $2.5 billion valuation of its AI startup, UniPat AI. On August 23, Alibaba sought to raise $10.2 billion to pay for increasing its AI capabilities.
Investors reacted poorly to the share sale: BABA stock fell from $120 to close last week at $109.30.
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