Title: The AI IPO Dilemma: Lessons from History
As US tech valuations soar, anxieties about an AI bubble grow, intensified by rumors of OpenAI’s anticipated $60 billion IPO. Historically, significant IPOs often signal market peaks, draining liquidity and prompting volatility. Events like PetroChina’s 2007 debut exemplify this “gigantic curse,” where excessive fund absorption led to sharp market declines.
In the US market, while its size mitigates direct impacts from massive IPOs, structural concerns persist, evidenced by Rivian’s post-IPO plummet, marking a possible tech bubble onset. Key indicators suggest current AI valuations are elevated, with the Buffett Indicator exceeding the speculative level notable in the 2000 Internet bubble.
However, substantial backing for tech giants these past years provides a contrasting cushion. Increased AI debt financing raises red flags akin to the unsustainable practices seen in telecom during the last bubble. Investors should remain cautious; without performance alignment for firms like OpenAI, the ramifications could reverberate across the market.