In what could become the largest wealth-creation event in Wall Street history, OpenAI, Anthropic and SpaceX have filed to go public with valuations collectively in the trillions of dollars. With thousands of employees poised to become mega-millionaires, some billionaires, and Elon Musk in the running to become the world’s first trillionaire, there is intense speculation about what comes next.
In San Francisco this is particularly true as the city is home to OpenAI, Anthropic, and many other AI unicorns on the IPO watch lists which include Notion, Harvey and Plaid. Additionally, there is a lot of excitement over Databricks and Stripe, even though both companies have recently said they are in no rush to go public.
For venture investors, the immediate impact is clear: more liquidity, more risk-taking and a new generation of founders armed with capital and ambition to fuel the next era of innovation.
“These IPOs mean that a lot of money is going to flow back into the San Francisco Bay Area and the overall tech ecosystem, said Siddharth Ramakrishnan, Principal at Scale Venture Partners. ”We’re going to see more angel checks, more people chasing crazy ideas, and more founders pushing the envelope than we have in a while. After all, PayPal’s exit is what gave Elon the capital to chase SpaceX in the first place.”
Ramakrishnan points to PayPal’s $1.5 billion acquisition by eBay in 2002 as one of those seminal transactions whose ripple effects is still shaping Silicon Valley. The deal created a generation of wealthy founders and funders dubbed the “PayPal Mafia” which included Elon Musk, Peter Thiel, Reid Hoffman, Max Levchin, David Sacks, Roelof Botha, Jawed Karim, Steve Chen and Chad Hurley. They would go on to build some of the most influential technology companies of the modern era including YouTube, Palantir, Affirm, Founders Fund, LinkedIn, Tesla and SpaceX. Reid Hoffman and Elon Musk would become part of the group that founded OpenAI in 2015. And six years later, seven OpenAI employees would go on to found Anthropic.
“These IPOs will give these frontier labs—and their inevitable spinouts—the means to invest in building their capacity and growing the overall AI ecosystem, which is exciting,” Ramakrishnan explained. “But they’ll also drive up Bay Area housing prices even further, which is not.”
Trepidation over what the IPOs will do to affordability in the region is quickly making San Francisco a tale of two cities–one of the stocks-haves and have-nots.
With people selling their homes for OpenAI and Anthropic stock amid mass layoffs due to AI productivity gains at companies like Salesforce, ServiceNow and Block, reports of shocking rent increases have been driving residents to question whether the coming boom will lift the broader economy or simply make one of America’s most expensive cities even more unaffordable.
Of course, San Francisco has always been a boom and bust town, back to the days of the Gold Rush. And out of the ashes of the Great Recession from 2007 to 2009, came the iPhone and mobile app economy, with San Francisco startups Uber, Airbnb, Instagram, Slack, Square and Instacart forever changing how we live our lives. We are at that pivotal moment again, said Manthan Shah, Principal at WestBridge Capital.
“This is a historic time for the startup ecosystem. We have never seen this amount of capital raised by one company, let alone three companies,” he said. “The amount of liquidity and capital available for startups is going to be at a historic high. Data center spend is already on a tear that will continue.” Shah is keeping watch on the next 18-24 months for the most audacious ideas.
Wen Sang, cofounder and COO of Genspark, a no-code agentic workspace startup that made it on to the Forbes AI50 list this year, said he is looking forward to the OpenAI and Anthropic listings as a major liquidity unlock for the broader ecosystem and notes Genspark is already seeing increased inbound investor interest as momentum builds. The Silicon Valley-based company reported a $2.6 billion valuation at the close of its Series B extension with $250 million in annual recurring revenue.
Further afield, Finnish VC Play Ventures’ Anton Backman agrees that the IPOs will serve as a liquidity unlock to free up capital currently concentrated in the LLMs and foundation model race, and start to fund the application layer.
“We’ll finally see VC growth capital move into hot consumer categories like microdramas, AI utility and prosumer tools, and AI-native creative tools now that they’ve proven they’re here to stay. That consumer thesis is exactly where we’re placing our bets,” he said. “Kalshi and Polymarket already show that modern consumer platforms can attract VC at real scale, but now we want to see that trickle down to other categories as well.”
Updated with Genspark and Play Ventures comments.
