View / The real reason not to IPO

There’s a groundswell of people in Silicon Valley and Washington claiming the AI doomer narrative sweeping the nation is part of some carefully coordinated “psyop.” I don’t buy that.

Some inside OpenAI and Anthropic were “blindsided” by an apparent agreement over the weekend that both companies would slow down the pace of AI research, the FT reported. Leaders haven’t communicated a new strategy and staff are confused about what to do next.

These are not the moves made by startups ready to enter the public markets, which tend to get spooked by companies that don’t know whether their products can be trusted not to destroy humanity, let alone complete an accounting audit. And that’s why Sam Altman’s decision to push an IPO to next year is the right one.

While OpenAI has been around for more than a decade, its real founding happened less than four years ago, when it launched the chatbot that changed the face of the tech industry. Before that, OpenAI and Anthropic were essentially research laboratories, running on the thrill of innovation without the pressure of revenue models or Wall Street analysts. Put that into the context of other Silicon Valley heavyweights: It took Uber a decade to IPO, with Airbnb, Palantir and SpaceX taking even longer than that (SpaceX was technically founded in 2002).

These capital-heavy companies are eager to hit the public markets because of their ever-growing race for cash. It’s no different for the AI labs, which need gobs of money to pay for massive amounts of compute needed to build out enough inference capacity.

But there’s still plenty of cash out there willing to help pay for the data center and compute buildout. The bigger issue for the labs right now is having the space and time to build the biggest, most powerful LLMs and work out all the regulatory, safety, communications and technological issues — without the public stock markets distracting them.