Wall Street is advising Anthropic and OpenAI to launch their proposed IPOs sooner rather than later, and it’s not solely due to concerns about an AI bubble, according to insights from On The Money.
Big investors are increasingly worried about the potential for a left-leaning takeover in Congress. They envision scenarios where Democratic Socialists could scrutinize tech leaders over issues like job losses caused by AI or the dangers of deepfakes.
“It’s going to be a long span of hearings and investigations, creating constant upheaval,” noted a prominent Wall Street lawyer. “We’re recommending that companies proceed with their IPOs before year’s end, before the situation escalates.”
As previously reported, Anthropic is expected to unveil its official offering statement or S-1 soon, aiming for an IPO ahead of Thanksgiving.
Conversely, there are significant concerns about OpenAI. Their CEO, Sam Altman, recently mentioned that the company isn’t planning to go public until next year, citing AI safety as a key reason.
Insiders on Wall Street are urging that OpenAI should proceed with its IPO soon but certainly before January 3, when the Democrats could officially take over if they succeed in the upcoming election.
“We’ve consistently maintained that a timeline for an IPO hasn’t been established,” an OpenAI spokesperson commented. “Last month, our CEO reiterated that safety is our primary concern, and the company won’t be going public this year.”
No immediate comments were available from Anthropic representatives.
Additionally, there’s a significant secondary stock offering anticipated from Meta, the parent company of Facebook, to fund its AI initiatives, which may occur in the near future.
There’s a possibility that even Anthropic might hesitate and delay its IPO amidst investor concerns about reaching peak valuations in AI. The situation might also change based on the outcome of the elections, where the GOP could manage to retain control despite President Trump’s low approval ratings.
If the Democrats do secure both chambers, as some polls indicate is quite likely, it could result in legislative gridlock. This situation might actually be favorable for the markets, since it typically means a halt to significant legislative changes that could disrupt operations.
However, there’s a nuance here. Many incoming Democrats are not traditional centrists; they are more aligned with the far left and might not be interested in cooperating with the administration. They appear ready to oppose Trump more vigorously than ever.
The potential for criticism directed at Trump regarding his push for AI development is significant. Even within the GOP, candidates are revising their stances on AI, moving away from the previous aggressive expansion narrative.
Some Republicans, much like their Democratic counterparts, are now advocating for a measured approach to AI development, emphasizing that tech companies should provide tangible benefits to communities affected by new data centers, due to concerns about energy consumption and resource depletion.
On Wall Street, there’s a strong belief that the House is likely to flip to the Democrats, with nearly a 70% chance they’ll win the Senate, though the race in Michigan appears to be quite competitive, slightly leaning towards Democrat Abdul El-Sayed over Republican Mike Rogers.
In Texas, Democrat James Talarico is slightly leading in the Senate race, while his opponent, Ken Paxton, is struggling, though he may still secure a victory with support from Greg Abbott’s re-election campaign as governor.
Still, GOP wins, while not impossible, could be challenging to achieve. This is why there’s a sense of urgency for key players in the AI sector to make their moves now.
