OpenAI Hits Pause On Its IPO

Ed Elson is joined by Alex Heath to break down why OpenAI is reportedly delaying its IPO. Then, Jemima Kelly joins the show to discuss what the Bitcoin selloff means for the crypto market. Finally, Ed gives his take on new data about the AI boom that raises even more concerns about a bubble. Alex Heath is the author of the Sources Newsletter and co-host of the Access Podcast. Jemima Kelly is a columnist at the Financial Times. Subscribe to the Prof G Markets Youtube Channel Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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• 1:45Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. It is June 30th. Let's check in on yesterday's market vitals. The major indices climbed as tech stocks rallied. The Dow closed above 52,000 for the first time. Comcast jumped 5% after announcing it is spinning off NBC, Universal and Sky from its cable business. Meanwhile, oil rose after the US and Iran exchanged fire over the weekend. President Trump said the two sides are now set to hold fresh talks today, though Iran denied those claims. And finally, Treasury yields were stable after the Supreme Court overruled Trump's attempts to fire Fed Governor Lisa Cook. Still, in a separate decision, the court expanded the president's authority to fire

• 2:30Ed Elson?

  officials at other independent agencies.

• 2:35Ed Elson?

  Okay. What else is happening? OpenAI is reportedly delaying its IPO until 2027. The company confidentially filed to go public on June 8th and was on track to debut as soon as this fall. But according to the New York Times, the fallout from SpaceX's rocky IPO has pushed OpenAI executives to hit the brakes. Meanwhile, rival Anthropic is racing ahead. CalSTRY now puts the odds that Anthropic goes public this year at 76%. So to discuss what this delay actually means for OpenAI and for the AI markets in general, we're speaking with Alex Heath, author of the Sources Newsletter and co-host of the Access Podcast.

• 3:20Ed Elson?

  Alex, thank you for joining us. This is huge news, unconfirmed officially. But this was reported by the New York Times. OpenAI, the plan was they were going to go public. They filed confidentially and now apparently they're scared of doing it this year. You do a lot of reporting on OpenAI. What do you actually know about this? What can we actually take away from this news?

• 3:44Alex Heath?

  I think this was always very much in flux. It's been interesting to see how many versions of OpenAI IPO-ing we can get in the press in the last couple of weeks. It's been kind of remarkable. I think there's a lot of investor banker types who are trying to gin this up. I don't think OpenAI is ready. I know that they're still trying to get their finance and investor relation org in place for what is needed for a public company. When you do the confidential filing, you're, as OpenAI said when it did that, you're really just setting yourself up with optionality to then be able to go out at a later date. But, you know, I remember Reddit, that thing was

• 4:27Alex Heath?

  in confidential filing for years because they thought they were going to go out and then they didn't. And I can't remember if it was the pandemic or something else, but it's very common for companies to do a confidential filing, which is just starting the process with the SEC and then delay multiple times, even years in some cases.

• 4:45Ed Elson?

  Doesn't it seem though that at least there are people within the company who definitely did want to? The person I'm thinking of was Sam. And I remember we saw that reporting and who knows what's true at this point. But we saw this reporting where Sam Altman wanted to go public. He was trying to push that. And then the CFO, Sarah Frye, said, no, I don't think we're ready. I don't think this is the time to do it. I mean, I have to assume that there are people within the company who really wanted this to happen. And now they're probably having to concede, maybe this isn't the right time, specifically Sam.

• 5:19Alex Heath?

  Yeah, I mean, the reporting is that Sam has been pushing for it, which I totally buy and that he wants a one trillion valuation, which I also totally buy. I do think there's probably others who are saying, we're not ready. OpenAI and Anthropic, these are not normal companies. They don't work like normal companies. They're incredibly chaotic. They don't have formal processes in place that a mature public company would have. As commercial entities, they're really only a few years old. So even though they have these massive valuations, they very much feel, and you feel this when you talk to people internally, like a startup. And that has a lot of things that have to be ironed out before you can IPO. I do think Anthropic will go out first. I have heard and others are reporting that

• 6:03Alex Heath?

  they're eyeing October, November. I think they're a little farther along on building that muscle. They also have a bit of a simpler story to tell investors because of the kind of clarity of what they Do is primarily an enterprise API business. OpenAI just has a lot of wild cards, right? Ads are still rolling out. That story's not there yet. The hardware stuff they're going to be doing with Johnny Ive, starting with the first device I think they're going to announce in the fall. That's a giant wildcard. Their super app strategy has not yet come into place. There's a lot of moving parts and there will always be with these AI labs. But I think Anthropic actually just has a simpler story to tell right now, which is also why we'll probably go first.

• 6:46Ed Elson?

  I think that's exactly right. But I part of my takeaway from this is it seems as though OpenAI on multiple different levels doesn't really have its shit together. And this, the confidential filing, to your point, this happens. Companies file, it takes a while. But you also have to assume that, I mean, someone within the company should have known if we file, it's going to be reported on. And if we don't go public, that'll be reported on and everyone's going to have a lot to say about all of this. The same is true of saying, we're going to stop doing these side hustles, which was sort of their MO. And then they go out and continue to do these side hustles, including going out and spending $200 million on a podcast.

• 7:28Ed Elson?

  I mean, I feel like there are multiple different levels in which OpenAI doesn't really know what it's doing. Or at least that's the vibe I'm getting from all of these stop and start announcements. Am I being too critical or would that be a somewhat fair characterization of the company?

• 7:44Alex Heath?

  I think they are a jittery company. I think this IPO thing is really being genned up in the media by investors. I think the only concrete thing that's happened is they filed a confidential S1. They said they would do that. They, when they announced it, they said, we do not have a sense of timing.

• 8:05Alex Heath?

  That is the only thing they have confirmed. And then there's a lot of anonymous reporting about, you know, they were thinking about the fall and now they're thinking about 2027. We may get a new round next week saying they're thinking about the fall again, based on whatever leaks out of Anthropic. There's a lot of messages being sent through the press right now. I wouldn't necessarily take all of this as like super concrete. Think it is a very dynamic, fast-moving situation. Anthropic's ARR could crater for some reason in the next quarter and then the story is not there. OpenAI's super app thing could not work and then it needs another year to regroup from that. Ads could not work, the hardware could not work. You know, they may need to redo the executive bench, right? There's, there's a lot of things that they have to get through.

• 8:49Alex Heath?

  I do think they will IPO. I would be shocked if it was in the second half of 2027. I think it will be before that, whether that's Q3, Q4 or Q1, Q2 next year. Remains to be seen, but we are going to get an IPO because you kind of have to. They've raised too much money. I mean, this is the natural end state. They could do another private round. They'll do an employee tender offer here soon. But, you know, I do think Sam in particular wants the IPO. And, you know, based on the success of SpaceX, at least, you know, on the IPO day. They certainly have a path to that, I think.

• 9:24Ed Elson?

  Well, it's funny you mention that because one of the reasons that was cited in that article for why they're worried about going public was that they saw SpaceX as a failure.

• 9:34Ed Elson?

  To your point, massive pop on IPO day. Since then, it's come crashing back down, but it's kind of around where it was when it started. Do you think that that is genuinely a reason that they're worried about it when they look at SpaceX?

• 9:52Alex Heath?

  I don't know, man. SpaceX, you, you went into the numbers. Is SpaceX trading at one point or 2.16 trillion a good outcome or not for SpaceX? I mean, based on their revenue, I think it's pretty good.

• 10:06Ed Elson?

  I also think it's, it's ultimately pretty good. I think ultimately it's not going to last and I think that's going to be a problem. Which was honestly why I was a little surprised to see that in the reporting, that they saw SpaceX as a problem.

• 10:18Alex Heath?

  Did Scott calling Tesla being over not teaching anything, Ed? You can't, this is Elon, come on.

• 10:24Alex Heath?

  Look, I think, I think SpaceX at 2 trillion and raising 80 billion or whatever on the IPO signals there is a market here. I don't know if like, you know, the third big AI IPO. Gets as much love as the second, right? I think that's why OpenAI and Anthropic really want to go first. One of them. It will be a little tougher sell when you hit the third one. I mean, how much retail demand is there for these things? And where will the world be in the fall with the midterms? Everything going on in the world, right? So the fall gets kind of hazy and complicated in a lot of ways. I think Elon times SpaceX perfectly in the sense of this, you know, AI bubble furor we're in in the markets. And it's, I think it's very unclear what happens. You know, the Fed may raise rates in the fall.

• 11:10Alex Heath?

  There's a lot of things that could make the stock market a really dangerous place.

• 11:14Ed Elson?

  Do you think that ultimately this has implications for the AI trade at large? I mean, if the signal we're getting from OpenAI is there isn't enough demand out there, there isn't enough excitement or hype or we're not ready.

• 11:31Ed Elson?

  Does that mean that we're headed for some problems in the AI market at large? Or is this more of an OpenAI specific issue?

• 11:40Alex Heath?

  I think it's an OpenAI thing. I think these companies are just not ready. And they're way more chaotic than they look, even on the outside, even to people following them. They're startups still. They don't have all of the rigor in place that you need as a public company. OpenAI's disclosures are a mess, right? With, you know, Sam owns no equity. They're invested in all these things that they're doing deals with. The governance is all over the place. I mean, it's just a very complicated company to try to like, make sense of. If you're like the SEC. So I think they're probably just going to keep sending smoke signals out, you know, of like, oh, we're going to do it now. Oh no, we're going to do it now. And like Anthropic will do the same thing. And we are in uncharted territory.

• 12:24Alex Heath?

  I mean, I feel like that's always the case with AI and the AI trade, but it really feels that way now, doesn't it?

• 12:30Ed Elson?

  We should literally do a smoke signal from Sam Altman's house. Let it out like the Pope when he finally decides that it's time. That'll be, that'll be the right story for investors. Okay. Alex Heath is the author of the Sources newsletter and co-host of the Access Podcast. Alex, always great chatting with you. Thank you so much.

• 12:47Alex Heath?

  Always great. Thanks, Ed.

• 12:52Ed Elson?

  After the break, Bitcoin enters a world of pain. And for even more markets insights, you can subscribe to my weekly newsletter, Simply Put, at simplyput.profgmedia.com.

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• 14:45Ed Elson?

  We're back with Prof G Markets. The price of Bitcoin is plummeting and as of now, the sell off is showing no signs of stopping. In just the past month, Bitcoin has fallen from around $73,000 to $60,000. Last week, it hit its lowest point since October of 2024 before the election. And despite the Trump administration's pro crypto agenda, investors today are nowhere to be found. All told, Bitcoin has erased more than 18 months of gains and it's down over 40% in the past year. So for more on this implosion in the crypto markets, we are speaking with

• 15:25Ed Elson?

  Jemima Kelly, columnist at the Financial Times. Jemima, thank you so much for joining us. Back in February, we were seeing a lot of weakness in the crypto markets. Bitcoin took a leg down to around 70,000 ish and that seemed really bad at the time. And you wrote this column basically saying that Bitcoin was, in your view, due for even more pain. And that is indeed exactly what we're seeing. We're now down to 60,000. It's basically been cut in half since its highs of around 120,000. Let's just start with your reaction to what we're seeing here in the crypto markets.

• 16:04Speaker 13

  I mean, yeah, as I wrote, I still felt that Bitcoin was 70,000 too high when it was at 70,000. So I now think it's about 60,000 too high. I think that fundamentally, there's nothing there because it's all just belief and therefore eventually we'll get to zero. I've never been someone who wants to kind of, you know, say when that's going to happen, but it definitely has felt to me, the reason I wrote that column in February is because it has felt to me that this is kind of the kind of, we're getting to the last bit of Bitcoin. And I'm not going to stick my neck out and say it's going to happen this year that we're going to zero. I don't think it will happen that soon. But the fact that we have this incredibly friendly

• 16:49Speaker 13

  Crypto environment and it's still kind of doesn't seem to be finding any way of like any support does suggest that that we're heading down and down and down from here.

• 17:01Ed Elson?

  Your view is that $60,000 is $60,000 too high, that actually the true value is zero, which for many, that would be an extremely striking statement. Why do you believe that this is, that this is worth nothing?

• 17:19Speaker 13

  There is nothing that underpins Bitcoin other than belief. It is built on sheer belief. And obviously, stock markets and other markets are built to some extent on belief. And we're constantly thinking about a price of an asset is based on past performance and expectations for future performance, future growth, future returns. And so obviously, there's always a speculative element within any kind of asset price. With Bitcoin, there is only speculation or crypto. And people don't like Bitcoin to be lumped into crypto because that's their way of making Bitcoin scarce. That gets me to the next problem. There's no scarcity. There is an unlimited number of cryptocurrencies. So you can't

• 18:03Speaker 13

  really have value without there being scarcity because otherwise, why would someone pay for something if there's an unlimited amount of it? So the way that people try to make Bitcoin scarce, which it is because there'll only ever be 21 million Bitcoins, that was baked into the code in the beginning, is by saying that Bitcoin's different from all the other cryptocurrencies. It is insofar as it's got the first mover advantage, but apart from that, it really isn't. And it maybe has a network effect and everything. But again, that's what we're saying there is Bitcoin's different because it has more belief. It's more established, that the belief in it is more established than the others. So again, it's, if there's no scarcity and there's nothing fundamentally underpinning

• 18:48Speaker 13

  that price, there's no bottom, there's no floor. So people say, oh, it's like gold and gold is speculative. Sure, gold is partly speculative. But people, I'm wearing gold. We have gold in our iPhones. Gold is useful. People like to wear gold. It's a real thing. Bitcoin and cryptocurrencies just represent digital.

• 19:08Speaker 13

  Strings of digits, that's all they are and they are, but people have assigned value to those strings of digits. And once people, once people stop believing, then it will go to nothing because that's all there is. There's nothing else under there.

• 19:24Ed Elson?

  I've been wondering, at what point will people decide, because I mean, I find Bitcoin to be a precarious asset as well. I've been wondering, at what point will people decide, you know what? We don't believe in this thing anymore. Is this that moment?

• 19:37Speaker 13

  I don't think that that moment is going to happen all in one go. I think that moment is is starting to happen. And there will be a final kind of death spiral in which everyone quickly runs, tries to run for the exit. We're not, we don't seem to be completely there yet because Bitcoin isn't in complete freefall. Cryptocurrencies aren't in complete freefall. There are a huge number of vested interests who will, I mean, that's the thing. That's why I consider it a headless Ponzi scheme because it's or a kind of akin to somewhere between a Ponzi scheme, pyramid scheme, multi-level marketing scheme, because it relies on constantly recruiting new people. And it requires also, in in crypto's case, it really requires a lot of people who

• 20:18Speaker 13

  kind of stay and hold on, huddle, you know, hold on for dear life. And, you know, don't sell. And you really need people to not sell in order for the death spiral to not occur. You've now got Michael Saylor, who's like the big dog of Bitcoin. I don't know what to call him, but he is the kind of biggest holder of Bitcoin in the world. He, you know, turned his company into a Bitcoin holding company. He's now saying he's going to sell over a billion dollars worth of Bitcoin. So it's not, I don't think it's like necessarily now, but I think that what what we're seeing is crypt, each time crypto has had a big run up, there's been a narrative, there's been a story for why it's going up. And there has, there's been a reason, right? So you had in 2017,

• 21:03Speaker 13

  you had ICO mania. So you had these initial coin offerings, ICOs, that basically people were just like making money out of thin air. Everyone was getting rich and people were just like coming up with these ridiculous tokens and running off with the money. And because people had to buy Ethereum, Ether, the cryptocurrency native to the Ethereum network, that was going up massively in value and all the other cryptocurrencies were going up with it. So there was that reason for the kind of big boom in 2017.

• 21:33Speaker 13

  Then you had a later boom was fueled by the NFTs, non-fungible tokens. So if you remember that and the metaverse and Web three and people were suddenly convinced that, oh, my gosh, like this is the future of the internet.

• 21:45Ed Elson?

  I think that was the dumbest era of markets in my lifetime. Yeah.

• 21:49Speaker 13

  Well, NFTs and ICOs, to be honest, it's really hard to know, to like, like,

• 21:53Ed Elson?

  Fine line.

• 21:54Speaker 13

  ICO is arguably worse than NFTs, but yeah, they're both pretty bad. But the most recent run up in prices was a bet on Donald Trump basically being this like crypto president, despite the fact that obviously a few years ago, when he was president, the first time around, he said that he doesn't believe in Bitcoin crypto. Because suddenly it seems like he had some meetings with some, some, some kind of big crypto executives who might have been willing to maybe buy his crypto coin and maybe give him some money. Suddenly he was going to be the like Bitcoin president, make America the crypto capital of the world. And in that context, we've seen crypto actually doing badly. And so there's kind of like, that was like, when you keep seeing these narratives unraveling,

• 22:39Speaker 13

  there starts to be like a loss of faith because it's like, well, hang on, this was meant to be the time, you know, people are putting Bitcoin into their ETFs, into their 401Ks. All of these executives have been like, you know, pardoned and released from prison because like Donald Trump was, in that setting, in that like extremely permissive setting, if crypto is still not thriving and actually doing worse than it was before Trump came in, that seems like a kind of problem because what's the next story like, and have we kind of run out of stories? And I think perhaps we have run out of stories because people are becoming a bit, little bit disillusioned because each time there's a new story, it turns out that it kind of turns to nothing and then crypto crashes again.

• 23:21Speaker 13

  So yeah, I think, I think we've kind of run out of stories for crypto and I think that's an issue.

• 23:27Ed Elson?

  Jemima Kelly is columnist at the Financial Times. Jemima, thank you so much for your time.

• 23:31Speaker 13

  Thanks for having me.

• 23:36Ed Elson?

  If you were worried we're in a bubble, I have some news for you that probably won't help. A new article by Baolan Wang, a finance professor at the University of Florida, reveals that first quarter earnings this year were artificially inflated by roughly 12%. How is that possible? Well, it's all because of a strange accounting standard known as ASU 2016 01. Under this rule, companies are asked to measure the value of their own private venture investments and then report those returns or losses on those investments in the other income section of their income statement. Now, historically, those numbers have been

• 24:18Ed Elson?

  rounding errors. Companies usually don't make huge venture bets that distort the company's earnings, but in the age of AI, that is no longer true. In Q1 of 2026, Alphabet, Amazon, and Nvidia reported a combined $69 billion profit, not from selling chips, or selling ads, or selling cloud services, but from gaining huge returns on their AI investments, specifically in their investments in companies like Anthropic and also OpenAI. In other words, despite the fact that these AI gains are still unrealized gains, they are nonetheless being realized in the earnings of some of the largest companies in the world. And it

• 25:03Ed Elson?

  is against those same earnings that investors are now pricing this market. And then looking at those price to earnings multiples, and then ultimately determining whether or not we are indeed in a bubble, which basically means that our main bubble indicator is now also in a bubble. So the question then becomes, how pervasive is this really? And the answer is, quite. Professor Wang estimates that private market valuations accounted for roughly 12 cents of every dollar of profit in the S&P 500 in Q1 of this year. And without those markups on those AI companies, S&P earnings growth would have come out to roughly 16%,

• 25:46Ed Elson?

  which is exactly the same as its five-year average. Put another way... All of this talk of how earnings growth is through the roof this year, all of that must now be taken with a huge grain of salt. Yes, corporate earnings have exploded, but they have done so on the backs of some very fuzzy private valuations in AI. In sum, it is becoming increasingly difficult to know what's real and what isn't in this market. And it is exactly in those gray zones that bubbles both materialize and ultimately collapse.

• 26:26Ed Elson?

  Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is Dad Chalon, Isabella Kinsel, Kristin O'Donoghue, and Mia Silverio. And our social producer is Jake McPherson. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.

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