Up until this point, the potential for an AI bust blast radius was limited to corporate investors, but this is going to cause regular retail/401k investors to get exposure, which could have far bigger impacts on a downturn.
Not to mention the insane wake-up call it is going to be for these AI stocks when 3 months after they launch they have to start making earnings calls and showing their financials. That quarter-by-quarter pressure and scrutiny is no joke, and probably the biggest downside of going public.
I'm bullish on AI, but kind of bearish on any specific AI company. None of the initial big dotcom companies like AOL or Yahoo survived at the scale they briefly had.
If we're doing historical comparisons, there was so much hype for AOL and Yahoo that drove valuations far beyond the economics. In time, the hypesters were proved wrong.
In contrast, there was overwhelming doom and gloom for Google's IPO, in spite of their incredible growth and margin economics. In time, the doomers were proved wrong.
There's so much doom and gloom about Anthropic that directly contradicts their astounding growth and margins. For a long-term investor, Anthropic is looking a lot more like Google not AOL.
I can only hope the doomer narrative dominates until I can get a few shares at a reasonable valuation.
Vibes are almost always wrong. Ignore the vibes and focus on revenue growth rates and inference margins.
Google is an excellent example of the companies that followed after the initial batch of big dotcom companies. They ate Yahoo's lunch. The dotcom bust was in 2000, and Google went public in 2004.
I'm betting more on the successors to this initial group of AI companies. The ones that have to build actual profitable businesses.
Google was easily 10x better than any of their competition. It was effectively alone in the market.
Most of us were using 56k modems to access the internet back then, Google's search returned results within a couple of seconds. Yahoo, Lycos, Excite, Alta-Vista were still loading. Then the search results themselves were so good you could often just pick the first result. They eventually added a button which just took you directly to the first result. Which I used.
Yea, that's easy to say now.
I was a relatively early investor (2008), but I was very hesitant early on because Microsoft was building an integrated search function, which became Windows Live Search, which became Bing. I definitely remember it took me to the beginning of the financial crisis to finally decide that it was going nowhere. I suspect it was the development of Google Maps that changed my mind.
Curious, why do you say that as if the "I'm Feeling Lucky" button isn't still on the homepage in 2026?
I couldn't even tell you when I used the Google search page. It's been years at least. I wouldn't be surprised if many other people also don't go there to search. I assume most search straight in the url bar.
Home pages are still a thing are are often set to google
Because it’s not there on mobile
Because it is useless now.
> Alta-Vista were still loading
Your memory is faulty. AltaVista was always super fast--it never had the advertising bloat that the other ones had until the very end.
The problem AltaVista had was that it didn't scale when the Internet went exponential--so AltaVista would give you good search results until you asked current, topical questions. AltaVista relied on running a single, super-expensive stonking huge Alpha machine while Google ran on lots of commodity servers that spidered constantly.
This is inaccurate. When I was running AV operations around 2000, we were running on a couple dozen huge Alpha machines for the index layer and queries. We had a bunch of smaller machines for Web serving, and a high memory set of Alphas as a caching layer.
See https://www.usenix.org/legacy/publications/library/proceedin... for the 1997 server count, which was before we got to the three tier architecture.
We also spidered constantly. A couple of those huge backend Alphas were dedicated to holding the constant spider index. AV had a well earned reputation for quick discovery, although I think Google wound up faster. We suffered a bit from maintaining separate indexes for the main corpus and recent pages, and I imagine Google handled that better.
But the period of time when our main index went to hell was the period of time when we failed to do a new main index crawl for several months. I won’t get into why that happened politically because my memory isn’t perfect and I don’t want to criticize anyone who won’t see this to stand up for themselves, but it’s absolutely the case that we let the index get stale.
And I will say that I think the execs were distracted by the idea of challenging Yahoo by buying a shopping site and a local news site of sorts and, unlike the Google of the time, they lacked the wisdom to focus on our primary product.
And now I fade back into the hedges, until the next time AV comes up… I suspect a high percentage of my HN comments are on this exact topic. It makes me sad.
FWIW, I preferred AltaVista over Google back in the day.
I stand corrected. Thanks for all your work.
And I still miss the AltaVista illustrated diagram (Java Applet) that would allow you to drill down and specialize the search results. No modern search has ever matched that, again.
Webcrawler was faster than both!
When did Google pivot to advertising?
Before the IPO; AdSense came out in 2003. Before that they really make much money.
Simple text ads to start. It was built on MySQL, Java and C++ and became how they made most of their money.
"until I can get a few shares at a reasonable valuation"
I doubt you will. Most likely IPO reference price will be like SpaceX's, 100x ARR or so.
You're better off buying Google who own a huge chunk of Anthropic at a much saner average.
If it's 100x ARR then I'll watch from the sidelines.
But if it's 40x in October, and inference margin is strong, and revenue is still growing 20% per month, then I'm in.
I don't think it's really doom and gloom, that's mostly on here.
The normies are all still excited/scared and the valuation based on secondary trading is going up and up.
Maybe not quite as crazy as the dot com boom but I'd say the current environment for AI and related equities is a lot closer to the mid/late 90s than 2004
Normies are on fire for SpaceX, where the economics are horrible and the hype is off the charts.
Normies have never heard of Anthropic, where the economics are incredible and doom vibes are pervasive.
I think both have a similar amount of people who know about it. But it might just be my circle which is mostly in finance and some in engineering/medicine. These are also the type of people who actually invest. There's little doom vibes among those who're older if anything they're the one who think we'll get to some agi type situation.
I don't see how they can keep their margins with all the pressure from Chinise models. It got to be race to the bottom on margins.
They (together with OpenAI and maybe Google) can have better margins on frontier models, but the demand on those got to be much lower
> focus on revenue growth rates and inference margins
And ignore debt you can't pay back? Fine during ZIRP era because there was always another $50M around the corner. There is no extra $50B around the corner.
They've all over-invested in AI, same as the railroads, and it will collapse the same way.
They've changed the rules that will force these companies into every ETF commonly held by people's 401ks. The doomer narrative doesnt matter, they're forcing the common man to be the exit liquidty for the elite before the bubble pops.
I am really surprised that people are comparing dot com with AI. Atleast dot-com era was deterministic, comparatively AI is just a probabalistic unreliable slop
So you're raising the topic of vibes, to tell us to ignore them.
Most of the time, they're wrong half the time.
>I can only hope the doomer narrative dominates until I can get a few shares at a reasonable valuation.
I conjecture that some amount of the "doomer posting" is a consequence of other people realizing what you realized here and attempting to sway public sentiment for personal gain.
> astounding ... margins
Citation needed for that one.
Ah yes, time tested and battle hardened inference margins.
Anthropic is selling a commodity item that was just invented. It’s like investing in someone who is blowing lightbulb glass by hand.
We’ve already seen a startup make a chip which generates a hundred pages of text in milliseconds. When companies start bringing out hardware like that for cutting edge models, the entire business is dead. AWS will just eat the market.
History does not repeat itself, but it rhymes. Drawing these comparisons to the Dotcom bubble is only of limited utility. I think there's good reason to believe that recursive self-improvement is a bust, and LLM models will become a commodity. The real value lies in multi-modal integration and good harnesses. The current frontier labs are theoretically in a good position to capitalize on this, but it is far from obvious that they will succeed. I think Google and some of the chinese giants are in a far better position to actually go the last mile.
Reminds me of this... During Apple's 1980 Initial Public Offering (IPO), Massachusetts regulators banned residents from purchasing the stock. The state's securities regulators deemed the offering "too risky" and "over-valued," enforcing a state rule that prohibited IPOs with a price exceeding 25 times earnings.
And it was probably prudent to wait. The investors who wanted to take more risk could do that.
Retroactive reasoning with investments (if I just bought X) is insane.
Indeed.
They IPO'd in 1980, yet their stock price was below the IPO price for the majority of 1980-1987.
It also fell to its IPO price for an extended period of time between 1996-1998.
You hypothetically could have waited 20 years after the IPO before investing without giving up theoretical gains.
> The investors who wanted to take more risk could do that.
What? How? By moving out of Massachusetts? I could understand banning such a speculative stock for e.g. pension funds or whatever, but blocking private individuals from buying with their own money seems insane.
Apple was a pretty crappy stock till the late 90s so you would have had to wait almost 2 decades to make decent money
Well Apple followed being a disaster for two decades.
Well we are far more corrupt and in the last stages of late stage capitalism. 15 day waiting period for Nasdaq 100. Your 401k is now the exit liquidty for the country's 5k richest people.
I really dont see how America doesnt collapse on the weight of its own corruption. But maybe the was the plan all along....
Maybe don't buy QQQ in your 401k then if you're concerned about nasdaq100 inclusion
Tell that to everyones 50 year old mother who doesnt even know how to login to their account, let alone modify their allocations.
50 isn’t old? I would expect a 50 year old mother to be competent.
Oh yeah, we should just get rid of all securities regulation too. Everyone should be competent on their own to avoid being duped by guys with billions of dollars. Its the elementary school teachers fault if they get scammed by a billionaire.
It's like the very first golden rule, do not expect competency from another human being.
The stock market (and in particular the US stock market) has been an incredibly positive influence on the average American's 401k... Great driver of allowing Americans and beyond to share in the upside of successful companies... big reason why Americans can retire.
Of course, it doesn't always go up...
I think you have an oddly negative bias.
I think you have too much trust in a class of Elites that see us as pigs to be taken to the slaughter. The lindy effect isnt real, just because it has been positive doesn't mean it will continue to be that way
The levels of greed in our society our unmatched. Planes, mansions and yachts for a few thousand people while 10s of millions struggle to buy basic medicine for their children.
Death to the fascist insect that preys upon the blood of the people.
> last stages of late stage capitalism
how long does this last? I've been hearing it for a decade.
Empires usually go through a long period of decline before they collapse. I'm not sure why you'd think this Empire is immune to collapse or decline.
You're going to lose everything and your children will have no future. When they're old they'll be speaking from a similar perspective to the people who lived through the decline and fall of the USSR. Keep coping though.
It's the indices we need to be concerned about and it's especially the bloated carcass of xAI hanging onto SpaceX.
SpaceX was a profitable company, it was heavily invested into R&D and had managed to build a tidily profitable connectivity business in Starlink. Now the company is being burdened with all the worthless debt of X and xAI with a likely merger with Tesla following launch just to hand Musk a big check when he hits the valuation targets.
IPO inclusion on indices should be illegal, the price discovery simply hasn't happened yet and it's a direct grab at the most vulnerable retail investors - the passive index huggers that were told that if they just buy an index it'll never be spectacular and it might dip but it'll steadily go up.
I would not be surprised if the US Government ends up bailing out retirees over this and cements the country's descent into debt. Pretty much everyone can see it coming, but we have to act as if Elon is valuing his companies in good faith and not just trying to rob a payday.
Let's get it in perspective though. The S&P500 market cap is currently $70T.
Assume that Anthropic, OpenAI and SpaceX all IPO and get included in SPY with the new fast listing rules. They are likely to be worth $3-4T combined, which means 'retail' investors are going to have perhaps 5% of their portfolio in it.
_Arugably_ that's a pretty fair allocation for retail investors to have to these "moonshot" style companies.
Also - if any one of these IPOs don't go well; I suspect the other(s) will have to postpone, further reducing exposure.
Who invests in an index fund for "moonshots"?
Everyone I know who invests in an index fund is doing so to mitigate the risks of things like "moonshots" which are typically much riskier investments.
> Who invests in an index fund for "moonshots"?
> Everyone I know who invests in an index fund is doing so to mitigate the risks of things like "moonshots" which are typically much riskier investments.
The whole point of an index fund is to capture the growth of the whole market. If you wanted low risk you'd be buying bonds.
Is it? I thought the idea was diversity of risk, not "mitigating risk". You clearly don't want 100% of your 401k in OpenAI or Anthropic. But you probably do want 1 or 2% of it in, to give you the long term growth potential?
Regardless SPY is actually a pretty "risky" index fund on some measures - it pays a (very) low dividend compared to many other intl/ETF funds and is weighted very heavily towards tech stocks (atm).
If you genuinely wanted to mitigate risk you would probably not choose SPY.
> Is it?
Given that they've had to change the rules of index funds to allow for this, yes, this is not what people expect.
But the US has never had $1T+ IPOs before. And also a huge amount of enormous private companies that don't want to go public for various reasons.
Also, the rules have changed before. It's not the first time these rules have changed.
I see both sides of the argument (it's definitely _not_ good for 401k investors if Anthropic/OpenAI/SpaceX make huge leaps in technology that allow for far higher earnings that they aren't able to access, for example).
But my main point is that these investors regardless would "only" have 5% exposure to these. That surely cannot be considered a systemic risk that the OP is inferring.
I don’t think your first sentence is true. The hyperscalers have spent north of 1 trillion in the capex boom as a direct response to AI demand, If you’re a retail investor, you’re already quite exposed.
I thought you could intelligently allocate 401k. I don’t think mine was etfs of nasdaq or s&p for some time now. Ever since Tesla got in
Most (all?) 401k plans limit you to a pre-picked list of ETFs and mutual funds you can invest in. Not to mention the standard advice for decades has been 'broad market index fund'.
Afaik this is the first time that an IPO is big that it immediately gets a significant share of a broad market index fund. The rules among the providers are actually quite diverse, so it's complicated. The Rational Reminder podcast discussed it in April: https://rationalreminder.ca/podcast/406
Their conclusion: It might be bad, but so be it. No need to change strategy.
if you want to personally manage your risk you can by taking a small short position or buying long dated puts.
It being in the public markets is something you can deal with if you want.
It being in private markets means you cannot choose to participate in the upside if you want.
The episode was excellent
Good thing is that index funds don't hold stocks at market capitalization but only at free float value. So a company whose shares are mostly held by founders, employees, and strategic investors gets a weight well below its headline valuation.
Most don’t. The one that is the center of much of the controversy around these IPOs, NASDAQ-100, doesn’t use float adjustments.
A lot of people have been using it to passively invest in AI (via QQQ).
It’s nonsensical for a variety of reasons but we live an era of the stock market just being another casino…
Definitely not all. Look into 401(k) self-directed brokerage accounts.
If your plan uses Fidelity you can move your 401k into Brokeragelink and that lets you pick individual stocks. Schwab, TIAA, Alight and some others also have something similar.
95% of people do not bother and just park everything in S&P 50/100
With BrokerageLink you can invest in anything
imho Anthropic publicly posting accurate information about their revenue and operations would be a step in a healthy direction for the economy/markets if there's an "AI bust blast" coming. This filing is movement towards that
The filing isn’t the problem. The indices dumping into them is.
Agreed. Ben Felix has a video about this, I think he focused on SpaceX in it. The problem with the standard total market funds is they gobble it up right away. There are funds that do wait some period of time to purchase new ipos to let them smooth out, but I'm not sure those are typically available in 401k plans.
Hedge funds already know broad based mutuals will have to purchase these so can sneak in before them and then sell to them for a marginal gain. Mayhaps the newest strategy for exiting is generating so much hype that you're guaranteed an exit by retail retirement funds?
Look at the P/E ratio Amazon has had for years and come back with a better argument.
[edit:typo]
Amazon has assets in the form of warehouses though. What assets do these AI companies have other than rapidly depreciating GPUs.
OTOH it’s pretty bad if the the general public can’t participate in the upside of AI and it’s only concentrated in a few private investors.
you cant have it both ways, the public can either have exposure and capture the upside or not.
there are ways for you to manage your risk if it in public markets, theres nothing you can do if its in private.
If your 401k is in QQQ then I'm not sure you're going for a low risk portfolio
> I'm bullish on AI
I started as being very skeptical circa 2024, became more open minded towards the end of 2025, and am becoming skeptical again now. Reason being, I interact with entrepreneurs now and I see what they hope for in AI. The universal desire seems to be "people will just talk to AI instead of me while paying me the same as before or more". This is typically covered with coping mechanisms (e.g. "I am not building a chat bot, I am building..." after which they describe a chat bot).
I think the crash is getting more likely because the disconnect between what the technology can be used for does not match what people want it to do.
Amazon was founded in 1994
And who would have thought it was the online bookstore that would be the big survivor of the dotcom era? They were a comparatively small player relative to AOL/Yahoo/etc at the time of the dotcom bust. Which company is the 1994 Amazon of AI now?
Cohere is the forgotten AI company founded by the Attention is all you need team....
Apple.
As I recall, Amazon also famously didn't turn a profit for ages - but they were also capable of turning one much earlier than they did.
Are AI companies capable of turning a profit today if they turn some knobs?
The narrative is that inference on existing models is profitable. All of the profits and many billions of additional capital invested go into training the next model, which is some multiple more expensive to train than the last. Each new model generation also leads to more revenue growth. Newer models are more compute-efficient when distilled (so could possibly be higher margin) but also they work on longer time-horizon tasks and can make greater use of test-time compute which increases token counts. So the inference ROI on each model can pay back the cost of training it, but future growth demands put all that money and more into training the next model. The numbers we’d need to prove whether this is true are not public, but it makes sense and fits what info we do have.
Theoretically, if training more expensive models stops resulting in better capabilities or isn’t economically viable, the labs can shift gears into making profit on old models. A lot of future growth is priced in so this would lead to a collapse in share price if it happens anytime soon.
There’s a story out that Anthropic might be profitable this quarter. This is in one sense bad news - it means that the company wasn’t aggressive enough about acquiring capacity last year, because they didn’t foresee how fast their inference business would grow. Anthropic is now forced to make suboptimal choices about serving existing users vs. training the next model (need to scrounge for capacity by paying other players like SpaceX). And as a Claude Code user I feel like I’ve been affected by that, what with the random outages and performance degradations.
Wait till people find out you can have the same or close to the same output at 1/100th of a price.
You cant possibly believe we'll be just spending more and more in tokens endlessly.
And if the margins are so good for anthropic they will collapse. There's too much competition in the field.
I don’t believe similar scores on small bounded tasks mean models are interchangeable. I’ve found that heavy token-burning workflows are good for my productivity (letting multiple sessions run async working of different stuff). Claude ultracode is an easy example to point to, but there are tons of harnesses out there doing similar things. I find using a higher quality model matters because it affects how far it can get unattended before heading the wrong direction. I’ve tried using the cheaper/faster models and it’s a real downgrade (or completely useless). A model that’s even smarter with longer time horizon would be even better for my productivity. I don’t think we are at the ceiling for model quality or price. My employer pays a lot for my tokens but it’s still a lot less than they pay me.
I agree Anthropic faces some risk they could get commoditized, but on the other hand if things go well they could end up leading adoption into more industries. There are upside and downside scenarios. Recursive self-improvement is obviously an important unknown and could lead to winner-take-all.
There's the "how much of my company exists in a black box controlled by some asshole" angle as well, but in my mind the biggest issue is that current models are already capable of saturating a dev in like four hours.
Yes - IIRC, Amazon was profitable on books by 1996, with other sectors following as they expanded and it was clear that they could post profits any time they wanted by slowing expansion. It was surreal through the bubble years to see “analysts” equating them with companies which were losing money on every sale with no clear way to change that.
Exactly right. Even though ride sharing industry lost money in subsidy arms race and side bets it was likewise fundamentally sound in major metros since early on. Popular "analyses" kept equating Uber/Lyft with firms losing money on every sale with no path to fix it but the demand was always there as riders had already left taxis and transit on reliability and convenience grounds.
There is a big difference between "Every customer is a loss" and "We are profitable and re-investing all of our money". Amazon continued to grow, and reinvested its revenue with solid business fundamentals.
> corporate investors
What? No. VCs, pensions, etc aren’t corporate investors in any common terminology.
Yeah. Sure. But, If you are charging for intelligence, I want in.
AI seem hard to go bust from the potential, but there is a point where it always can if numbers grow just right.
So big banks and Wall Street are about to get another bailout paid by taxpayers? Great.
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