How would they achieve ROI? The current consensus is that neither are in black financially and both have a diminishing moat.
The reason they haven't IPO'd yet seems to be that they can't assure investors that it's not a fad stock. With market share lost to China, a shrinking frontier and a money fire of GPUs burning in the background, something major has to change to convince investors to treat them like Tesla or Apple. I think both of them want the government to give them a subsidy of some sort to justify their economics.
Haha, I disagree with every single statement you made! Wild how we can see it so differently.
I think the ROI these big labs are seeing is incredible, I think their moats are increasing, I think their reasons for not IPOing yet have nothing to do with it being a "fad stock", I don't think they've lost any market share to China, I don't think their frontier is shrinking, I don't think their investments in GPU is a money fire, I think investors will rain money down on them when they IPO, and I don't think they're seeking a subsidy from the government.
Those are perfectly fine beliefs, but again - how will they achieve ROI?
If their finances are "incredible" while they're both in the red, their mediocre quarters will be devastating for investors. They either have to find a new revenue stream (likely from the federal government) or reduce their spending significantly. IPOing under the current condition would be a treadmill that neither company can recover from, even if retail investors shower them with cash.
However, I will push back on three of your beliefs. Objectively speaking, market share has been lost to China, the frontier is more competitive than it was 3 years ago, and the GPUs that OpenAI and Anthropic buy are almost never at MSRP. I get that you're bullish on American AI, but the writing is on the wall and economists generally aren't echoing your sentiment for a reason.
What? Everyone doesn't know that. I predict one or both of them will IPO before the end of 2026.