According to Apollo's co-president, increasing questions around the off-balance-sheet debt used by AI labs to finance GPUs will pressure them to go public sooner than anticipated. An IPO would provide access to more traditional and transparent capital markets, such as convertible debt and public equity, to fund their massive infrastructure needs.

A company can achieve a public listing without a traditional IPO. The strategy involves first using Regulation Crowdfunding (Reg CF) to raise capital from customers, building a wide shareholder base. With this pool established, the company can then pursue a direct listing on an exchange.

An IPO at a valuation that's flat compared to the last private round suggests the company is distressed. It implies the private markets are tapped out and the company is being forced to go public out of a desperate need for capital, rather than from a position of strength.

For highly-capitalized companies like SpaceX and OpenAI, bankers are designing new IPO structures. Instead of standard 90-180 day lockup periods, they're planning staggered share releases over a longer timeframe to manage immense selling pressure from a large base of private shareholders and prevent post-IPO stock volatility.

Venture capitalist Bruce Booth explains that bankers, lawyers, audit firms, and VCs all have strong financial incentives for a company to go public. This creates systemic pressure that may not align with the company's best long-term interests.

For late-stage startups, securing a pre-IPO round led by a premier public market investor like Fidelity is a strategic move. It provides more than capital; it offers a crucial stamp of approval that builds significant confidence and credibility with Wall Street ahead of an IPO.

Unlike traditional capital-intensive industries, OpenAI's model is asset-light; it rents, rather than owns, its most expensive components like chips. This lack of collateral, combined with its cash-burning operations, makes traditional debt financing impossible. It is therefore forced to raise massive, dilutive equity rounds to fund its ambitious growth.

The enormous private capital available to AI leaders, shown by Anthropic's $10B and xAI's $20B rounds, reduces the urgency to go public. This nearly unlimited appetite from private markets allows these companies to continue their aggressive growth and infrastructure build-outs without the regulatory scrutiny and quarterly pressures of being a public company.

Companies like SpaceX and OpenAI command massive private valuations partly because access to their shares is scarce. An IPO removes this barrier, making the stock universally available. This loss of scarcity value can lead to a valuation decline, a pattern seen in other assets like crypto when they became easily accessible via ETFs.