Many companies IPO'd in the late 1990s and did not exist 10 years later.
Let's say that the house of cards crashes down and takes the market with it who will shutdown, survive or have no choice but to get acquired for a 90% discount.
Some will be just alive long enough for the early investors to pull out enough before the market crashes.
And who will be the Amazon and grow 2500x over the next 30 years?
Now, I'm not saying that's going to happen -- but if you take analogies from the dot-com era and assume they're going to play out in the same way, you can't just cherry-pick the bad ones.
Amazon had valuation of $60M at their first venture round, and it took them 19 years to 3500x it to $200B.
Anthropic had valuation of $550M at their first venture round, and assuming it IPOs at roughly $2T, it will take them 5 years to give this 3500x return to their initial investors.
Companies IPO much later now because the laws changed. They used to be forced to IPO much earlier because employees shareholders pushed them over the threshold for # or private shareholders.
So you're absolutely correct about the comparison.
That said, I bet whatever happens over the next 20 years goes beyond what any of us can imagine. I wouldn't be surprised if the winners of this paradigm are worth hundreds of trillions. Sounds ridiculous until you look backwards and valuation a and consider this is an exponential curve and time is compressing.
With enough inflation, you and I might be worth hundreds of trillions. See: Zimbabwe.
Well sure..., but what might be less obvious is that a can of beans, a tank of gas, a wig and a chair can all inflate at 2% a year while stocks and land inflate much faster.
The way we measure inflation is focused on consumption goods that everyone depends on. It doesn't take into account the stock market.
In other words we could stay around 3% in measured inflation but see ~30% annual equity inflation...
So my point is that the most valuable companies in 20 years could be worth hundreds of trillions while the cost of a can of beans is like $5, not $200.
Zimbabwe type inflation happens when the economy doesn't get more efficient at producing stuff as fast as the government prints money. If the economy increases efficiency very quickly and the government prints money to peg at 2% inflation, the products we consume only increase a little bit while scarce assets increase a lot.
This is why in the time I took a can of beans to increase in price 3x a house increased 20x.
> I wouldn't be surprised if the winners of this paradigm are worth hundreds of trillions.
And the winners may be not be the obvious choice.
And, more importantly, the dollar is inflating.
> And who will be the Amazon and grow 2500x over the next 30 years?
Almost certainly nobody if you're tracking post-IPO growth.
And not because there won't be survivors/winners when the next crash comes (there probably will be) but because of the market changes (in the wake of legislation like the JOBS act) that result in these companies having their significant growth periods prior to IPO instead of after it.
IPOs used to be a launch pad to growth, now they are just a way for private investors to finally cash out when the company is already close to peak valuation.
None of the current vintage of IPOs are going to 2500x in our lifetimes (inflation adjusted at least..). The VC to IPO process is totally different now.
Companies are staying private longer, raising many orders of magnitude more private funding, and IPOing straight into "top 10 biggest companies in history" size.
If you IPO at $1.5T you are already equivalent to ~1.5% of World GDP.
Thus is just for scale, as comparing GDP vs a company market cap doesn't make total sense since GDP is 1 year economic activity and market caps represent discounted future cashflows of future economic activity...
Let's say Anthropic IPOs at $1.5T and grows even 1000x over 20 years, it would be worth $1.5P (petabillion?). If it had a 20x earnings multiple like google this would imply Net Income of $75T. Mag7 total Net Income for 2025 was $500B or $0.5B.
World GDP is $125T, and has grown less than 5%/year before/thru/after DotCom. So lets say in 20 years its $250B and Anthropic is capturing 30% of world GDP in earnings (not revenue, that would be even higher)!!
So the math doesn't math.
For comparison, Amazon had a valuation of $500 million at IPO, roughly 4,000x less than Anthropic.
You can cherry pick the bad ones if the point you want to make is that it's risky. Nobody is saying Anthropic is definitely going to 0, just that there is a risk.
But from an economics perspective OAI/Antropic are more similar to Amazon than to Pets.com. Pets.com always had a heavily negative COGS - they were in the business of selling $20 bills for $15. On the flip side, Anthropic appears to be positive on COGS, and OAI could get positive by cutting limits on free and $20 plans. OAI/Anthropic are negative on the books mostly because of massive R&D expenses. This compares well to Amazon circa 1999, which was positive on COGS but negative overall due to massive buildout R&D costs.
Note that I'm not saying OAI/Anthropic are destined for success - because the rate of change combined with competition with cheap Chinese models is pretty novel in the business case history. But I am saying that pessimistic dot-com-boom comparisons don't seem to be all that deep.
AI subscription plans are selling $100 bills for $10, they are way more expensive to the company than people buying metered tokens.
"they are way more expensive to the company than people buying metered tokens" is true, but that doesn't mean they're a massive loss as you imply. It could be that plans are effectively breakeven but tokens are highly profitable.
But this is further to the point that the economics are more Amazon than Pets.com. If the plans are losers, great, when they need to be profitable they kill the plans and focus on metered tokens.
> OAI/Anthropic are negative on the books mostly because of massive R&D expenses. This compares well to Amazon circa 1999, which was positive on COGS but negative overall due to massive buildout R&D costs.
Isn’t the difference that ai labs can’t stop the R&D spend? They have to continue training new models.
There's a bunch of arguments you could make there, varying from "yes, to stay ahead of the competition" to "yes, but it'll get a lot cheaper" to "no, things will plateau eventually". All those are datapoints that IMO this isn't a great analogue to the dotcom boom.
Except their own filing shows it’s getting more expensive, not cheaper. It’s highly unlikely that they’ll ever be able to stop.
A) they’re all getting acquired by these IPO seeking ones
B) nobody is IPOing at $400 million like Amazon did except SPAC share dilution scams, that you have to be willing to pick up at $30 million a year later
C) private secondary markets solve that, for some and are pretty great
D) tokenized synthetic and SPV backed private secondary markets in crypto ecosystems like Hyperliquid give you that exposure too, so now everyone can replicate the 90s
> B) nobody is IPOing at $400 million like Amazon did
Exactly You can't wait to IPO until you're already one of the 10 biggest companies ever AND also grow 2500x post-IPO.
Retail is now exit liquidity for Big VC.
Not really comparable. An IPO in the 90s is equivalent to a Series C or Series D round today.