AI IPO wave could trigger short term market pullback

Thursday 04 - 07:01

By: Dakir Madiha

AI IPO wave could trigger short term market pullback

The expected wave of massive artificial intelligence initial public offerings this year could create short term pressure on global equity markets as investors reallocate capital to absorb some of the largest listings in recent history. Standard Chartered warned that the process may not be seamless, even though the bank views any resulting weakness as a potential opportunity for long term investors.

According to the bank's wealth management division, upcoming public offerings from SpaceX, Anthropic and OpenAI are likely to test market liquidity. The combined fundraising target of the three companies could exceed $200 billion, a figure that far surpasses the total amount raised through all US initial public offerings in 2025. Such a concentration of capital demands within a relatively short period may force investors to shift funds away from existing holdings.

SpaceX appears to be the most advanced among the three companies. The firm publicly filed its S-1 registration statement in May and is expected to move toward a market debut in June. Anthropic and OpenAI have both submitted confidential filings to US regulators and are preparing for potential listings later in the year. The anticipated offerings reflect continued investor enthusiasm for artificial intelligence and space technology, two sectors that have attracted significant private market valuations.

Standard Chartered cautioned that market sentiment could weaken during the summer as investors digest these large transactions. Additional geopolitical risks, including any disruption to shipping routes through the Strait of Hormuz, could amplify volatility and place further pressure on global equities. Despite those concerns, the bank believes that temporary declines would present attractive entry points for investors focused on long term growth.

The scale of the planned listings underscores the challenge facing financial markets. SpaceX is reportedly targeting a valuation approaching $1.8 trillion and aims to raise around $75 billion. OpenAI and Anthropic are each expected to seek approximately $60 billion. Even if only a small percentage of shares are made available to public investors, the capital required to absorb these offerings would represent one of the largest concentrations of new equity issuance in market history.