For SpaceX (and possible the others):
Yes it can, since they changed the rules to force over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations.
From https://x.com/Hedgeye/status/2060435253928604065:
"Rule changes for the SpaceX $SPCX IPO:
Index providers waived the profitability requirement and cut the seasoning window from 90 days to 5.
This forces over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations.
Bloomberg Intelligence estimates S&P 500 funds must absorb 19% of SpaceX's float within 6 months.
Russell 1000 and Nasdaq 100 funds will absorb 24%.
The rules built to protect passive investors:
1. S&P 500 has required 12 months of trading and 4 quarters of GAAP profitability since 2002. Both waived.
2. Nasdaq cut its inclusion window from 90 trading days to 15.
3. FTSE Russell cut its to 5.
All three benchmarks are now structured to buy SpaceX at IPO pricing."
All these things are apparently valued at trillions of dollars these days. Where's the trillions, or hundreds of billions worth in improved quality of life? What has gotten better other than the ability to produce more crap?
In terms of SpaceX (the space portion of it) they've produced the cheapest way to get any payload into space. If you pay anybody else, you will overpay drastically depending on who you want to take your payload into space.
In terms of AI, we've seen even here on HN everything from mathematical problems that remaind unsolved, being solved, mathematical proofs being used to disprove theories, heck we even learned more about alzheimers, new antibiotics, precision targeting in oncology, using AI to flag healthcare anomalies in imaging. The benefits are easy to miss, but they're snowballing into place, there's definitely an explosion of useless crap, but you have to look for the real things and you will come to find, that AI is giving us things we otherwise either might not have discovered or wouldn't have within our lifetimes.
Isn't AI routinely making significant mistakes in analyzing medical imaging?
My understanding is that it’s better than doctors themselves. But it’s probably the same as with autonomous driving: the bar isn’t just “be as good as humans”, it’s “be flawless”.
A friend of mine, a dermatologist, told me that LLMs are quite performant for melanoma analysis. Based on their own statistics, LLMs are able to beat humans with ~10 years of experience in the field.
They will never beat the human instinct tho, but they can be great tools sometimes. Unfortunately, LLMs mostly produce garbage.
Thanks for the informed take :)
Do you think this will result in more routine/boring/tedious tests? Is the bottleneck on these things the human time to analyse them?
With these kinds of things, I want to see comparisons to trained, alert humans. Cut out all the distracted, stressed, tired, incompetent, intoxicated cases from the baseline. That includes rushed doctors at the end of a long shift.
A self driving car doing better than a drunk on the freeway doesn't reassure me that it'll do better than sober me in a snowstorm.
I’ve seen the same. But I don’t see that as a glowing beacon of progress.
A whole lot of doctors, if not most, didn’t pick their profession out of an interest in medicine…
It’s so good it even sees things that are not there!
> they've produced the cheapest way
Were we struggling to do this before? Was the overall percentage reduction in costs? Was some other achievement held back because we couldn't accomplish this? What is now enabled?
> to get any payload into space.
A limited set of payloads into space. No vehicle can get "any payload" to space at a fixed price.
> The benefits are easy to miss,
You've listed a bunch of reasons to publish papers. What is the actual ground level change that's occurred? Are those antibiotics produced? Do they actually work just as predicted? Why is that first world problems are exclusively listed but basic problems like world hunger are never even approached?
> or wouldn't have within our lifetimes.
And your life, your actual life, benefits, how?
> Were we struggling to do this before?
We literally couldn't.
> Was the overall percentage reduction in costs?
Starship will bill NASA 1/20th what SLS does.
> What is now enabled?
LEO. Artemis. Out of all of these companies, being confused about SpaceX is super weird.
If SpaceX was only Starlink or only Starlink and rockets it would be an horrible circumvention of the rules.
But now he's also trying to get the indexes to pay for the giant cash fire called X.ai and the far right huddle Twitter too.
I have zero interest in owning anything of either of those companies.
They seems to have decent revenue leasing compute to Anthropic.
> isn't their only profitable project Starlink? SpaceX is functionally a satellite internet company that happens to make rockets
Yes. The thing that’s going public is almost entirely an AI play.
> What has actually gotten better in practical terms for the average American?
Starlink has made connectivity cheaper and more available. Earth imaging has made various food production processes more efficient. Weather forecasts have become more accurate.
If you’ve genuinely missed the massive economy that LEO has become, it will be a fun thing to catch up on.
Do we apply a bar this high for any other company/job/business? Saving gov/tax money aka "billing NASA 1/20th what SLS does" doesn't count as worth it to you?
Reusing rockets reliably rather than "throwing them away" is a great achievement and I'm surprised people have to justify it on HN
Stock prices indicate the present value of all future dividends, so it's not about what has happened but about the risk-adjusted expected value of all which is to come.
What probability you assign to arrive at that expected value and how you adjust for risk is on you.
You'll overpay -- but not by trillions.
On one order, correct, but it's still on the order of hundreds of millions to billions.
Also, keep in mind that a stock price discounts expected future cash flows. Is it likely that SpaceX will have a near-peer competitor within a few years? No, it's not, and that market share is being priced-in.
Is it likely that SpaceX will have actual reasonable demand? Their major customer is Starlink. How legitimately confident are we in the numbers with regard to price reduction vs creative accounting to offload costs to Starlink and subsidize the launches to appear to offer huge cost reductions?
If there exists sufficient demand for the product of space launches then it's probably reasonable to expect their to be a near-peer competitor soon, but that's only if SpaceX were to be profitable, which it isn't, even with the subsidization by Starlink on the order of many billions.
Sure but SpaceX can get you into orbit for $1400 per kilogram, and future projection and goal is $100 per kilogram. The competition is at $15,000 per kilogram. I think it's a no-brainer for anybody trying to get anything into orbit. Unless someone figures out superior tech that surpasses SpaceX, I'm just not seeing why anyone would spend more for less capable and costly rockets.
Comments like these make me feel like we're living in different worlds. I use LLMs multiple times a day and they've significantly improved my quality of life. They are also steadily becoming more useful over time (e.g. now solving math problems).
I suppose many do live in different worlds.
I haven't found anything out of LLM's that has improved my life. It was a fun little toy but could never find a use case. But clearly, your mileage varies greatly from mine. That's cool.
I just personally don't the use in more when what I think many need is less. But that comes from essentially this point of view - “Better than a thousand hollow words is one word that brings peace.” ― Buddha
Comments like these make me feel like AI is a computer in the hands of a monkey, and that too the computer which is unreliable.
I use LLMs daily, both as chat applications and "vibe coding".
I wouldn't say it "significantly improved my life" however. Everything AI has done for me right now is a "Nice to have" but it doesn't fulfill my needs.
I do too, and pay $200/month, but anthropic’s margins on that revenue are negative.
What’s the long term plan? Make it up on margin? 100% tariffs on Chinese open weight models?
I don’t plan on pulling from my 401k for decades, so the long term plan is the part I care about.
Do you use Grok multiple times per day? Is Grok solving Erdos problems?
> Do you use Grok multiple times per day?
No body who has a choice is using Grok
> Is Grok solving Erdos problems?
Mēh! At a slower rate than models a fraction of the price
Grok revenue is like 100x smaller than xai estimated capex? Doesn't look great.
I’d love it if for once someone on here saying LLMs are some life changing apparatus would give a single example.
We have some exotic chicks the kids picked out, and 4 were going to die of brooder pneumonia.
An LLM correctly diagnosed it, and figure out that we could treat them with Nutri-drench Sheep Supplement, since Tractor Supply was sold out of the chicken version, and they are very similar.
Of course it then immediately recommended we use hemp bedding that would kill them a different way, but the saleswoman sanity checked all of the above,
100% survival rate.
Everyone’s thriving. Chickens would follow the medical advice again, I guess.
I can give some recent examples.
- Significantly increased my productivity as a software engineer.
- Using it daily for Chinese-English translation. Significantly better than pre-LLM translation software. Also, great at teaching grammar, nuances, etc.
- General Q&A. Like "Googling" but much faster. This is probably the most common use case for me.
> How are you measuring this?
I attempt a programming task with and without LLM assistance. The attempt with LLM assistance is pretty much always completed faster and cleaner.
Another example: https://news.ycombinator.com/item?id=43991777
> You’re going to have to define productivity as it applies to software engineering.
I meant it in a colloquial way. I just get more done, faster.
> And now you’re missing any kind of traceability for the information
Modern LLM assistants provide sources and references. While it can sometimes be just "slightly faster", it can genuinely save hours of research on complex ones. Also the "slightly faster" can add up to hours saved with frequent use.
Immediate medical and childcare advice from LLM are pretty life changing.
Interpreting reports, avoiding drug interactions, or knowing when to seek medical care. And before people object- I can literally use the same LLM my doctor does to check these things, without waiting 2 weeks for an appointment.
I helped my parents work through bacterial culture results when he was hospitalized with sepsis, and ask their doctor for specific follow up tests.
I rebuilt my gas furnace and fixed my dishwasher with AI as an assistant.
Those aren't the fun parts tho. My favorite is touring art museums ancient historical sites with an LLM guide. It can give me a short academic essay about every artist, painting, or artifact. It can pull out details quirky stories about the history that I specifically would find interesting.
I cant recommend this enough. Its like visiting with a 10 PhD docents in art history.
Some guy vibe coded a tasks app client that I really like. Not life changing but I couldn't find one that suited my needs since de-iPhoning before this one.
https://www.the-scientist.com/chatgpt-and-alphafold-help-des...
Literally saved his dog's life.
Even if they are, it still doesn't justify the ridiculous levels of overvaluation. They are not essentials and their consumer demand is extremely elastic.
Try to keep perspective, these valuations are just functions of the stock market the end result of some spreadsheet. They have nothing to do with quality of life. Why would you relate those two things in the first place?
They are fundamentally different, but people desire they be aligned. The public expects the economy to producing higher quality of life for us, otherwise what is it doing? And for whom? But whether it actually does so is a function of other things. That gap seems bigger than usual right now with AI and tech eating the whole economy.
> Where's the trillions, or hundreds of billions worth in improved quality of life?
Starlink and Claude are both awesome and huge QoL improvements for me!
Nominal global financial wealth is about $350 trillion. If you include real estate global nominal wealth is about $600 trillion.
A good portion of that[1] is what alot of people might call fake money--valuation inflation, etc. And global wealth, even just financial wealth, isn't quite as mobile across borders as one might assume. So marshalling a trillion dollars stateside is gonna make at least some moderate waves. Still, in the grand, global scheme of things a trillion dollars is a rounding error. A trillion isn't what it used to be, and there's trillions to be had even without any realized productivity gains from AI.
[1] I'm no financial analyst, but judging by the last few recessions and the overall trajectory over the past 30 years, I'd ballpark at most about 1/3 of that to go up in smoke if we had a severe downturn tomorrow. It's not all fake money. The whole world has industrialized over the past 30 years on a scale that is still unfathomable for most people today.
Raven, Raven.. that's for those who can borrow against that to know and you to likely never find out.
What you thought your life would improve? Didn't you hear, wages are only increasing, why don't you invest some of that sweet cash into @JumpCrissCross' fund, it'll be alright. What were you going to do with healthcare anyway?
Meanwhile the federal minimum wage is still $7.25/hr.
And how many earn this? Around 1% of hourly employees…if that. Not what I’d be concerned with right now.
? Who are you to say they deserve more than that.
I don’t know, ask the states that have lower wages on the books (even though federal prevails).
Quality of life doesnt matter. What matters is the choices people make to spend their money on. This is what drives profits.
If you are upset about people spending their extra productivity and labor hours on poision and mental laxitives, i would mostly agree. This is a failure of culture to adapt to distratcions and shiny objects
I think this is the story of tech in general. In my life, I've seen 3 really big steps down for the middle class: 2001, 2008 and then covid. Basic necessities are expensive today - people point to high GDP but what I see is high prices and poverty. And Tech, we've built a dystopian surveillance state.
> Basic necessities are expensive
There is going to be a well-deserved shitshow when these IPO proceeds start hitting real estate markets.
A shitshow for whom? I see it as extremely unlikely for the United States of America to not allow individuals to purchase things for whatever money they can pull together.
The only answer is to make it unacceptable socially, more costly economically (taxes, etc), or the third option which involves pitchforks (perhaps that also falls under "unacceptable socially") that I hope we can avoid at all costs. (is this the show you mention?)
Feels like folks used to understand the balance a bit better - but I think I made that up. This next governance cycle is going to be a trust-busting, wealth-confiscating one I think.
:)
Housing prices aren't going up. They peaked in late 2022. Boomers are a huge generation, with homes millennials and Gen Z can't afford to buy. And they are smaller generations.
> Where's the trillions, or hundreds of billions worth in improved quality of life?
I think these IPOs are going to mint tens of thousands of new millionaires or something. That, in turn, will generate massive tax windfalls for all levels of government.
> other than the ability to produce more crap?
This is a big "other than." (And to be clear, the jury is still out on whether AI will let us produce more in the long run.)
If jury is still out on positivity, long term, of AI, I'd really like to see arguments for that. Historically all - almost? - technical improvements were net positive; even some blunders had upside. AI is dangerous, yes, but e.g. fission was developed for the bomb, and now powers significant numbers of households worldwide - the tech less than 90 years old.
> all - almost? - technical improvements were net positive
I think it’s very likely AI is a technical improvement. But there is still a chance it’s a small improvement being massively overbuilt.
It's not a pyramid scheme, it's a reverse funnel.
The stock market is just a game that rich people use to manipulate money. It is not a reflection of the real world. Consider for example Google, one of the companies with highest valuation in the market. If Google stops working now, the only problem we'll have is getting a few minutes back of our time. Nobody will have big issues in life because one cannot find a web page, view more ads, and watch silly videos! However they will swear that Google is the most important company in the world to justify the money people throw at it. I won't even go to Meta, which is like celebrating that people are using crack cocaine...
you can replace “google” with every company that exists or has ever existed so no sure what the purpose of your comment is unless you are pitching abolishing the stock market. google is what they are because they make shitton of money and will continue to do so (more and more) into foreseeable future. that is stock market, always has been, always will be
if kroger shut its doors, my life would be much worse
this sounds like a reddit comment too much. why would trillions of dollars improve your quality of life. a bunch of companies get investments from a bunch of VCs who took out loans... and that means your quality of life should improve?
And what's more crap exactly? it feels like your grasping at straws to take one set of things and associate them with others. yeah, lots of terrible products out there, lots of enshittification, lots of topics of discussion there. But AI and GPUs are being used in such a diverse way it is impossible to have one opinion on it all like how you're trying to.
I'm not even disagreeing (or agreeing with you), I'm just saying that's a lazy comment to make. if these companies making profits without paying taxes, that's a voter problem (not even politics, just people being shitty voters, self not excluded).
For everyone else who might think they have a better formed opinion on this topic, I only ask that you apply the same level of passion to how the US national debt is now 120% of the GDP. The government is fighting wars and printing money, devaluing your wealth, and indebting your country to previously unseen levels. At least the banks and VCs are using their money (unless they get a bail out again), not your actual tax money, and the tax money and wealth of generations of Americans. You have a president literally stealing billions of dollars in broad day light from literally you.
Anthropic at $1t for an IPO vs Google at $23b in 2004 sounds insane but Google's revenue at the time was $2.7b while Anthropic's already at $47b, so a valuation at about 20x vs 10x revenue. Anthropic also has very high revenue growth (50x since 2024), it doesn't seems quite as insane as it could be.
That is revenue. What is the net profit?
If you are growing revenue at a high rate then taking profit is a misallocation of resources. That is short-term thinking. It is much better to reinvest in revenue growth.
You can take small profit now or much larger profit later. Insisting that companies need to be profitable even when growing revenue rapidly is failing the marshmallow test.
The point is that the unit economics are way worse because inference is expensive. Cost of goods sold matters, even if you're reinvesting profits.
I guess net isn't the relevant measure, but what are the unit economics? Are they actually making money selling tokens?
> That is short-term thinking.
Then why IPO? Isn't that even shorter term thinking?
They reported 559 million in Q2 of this year. OpenAI on the other hand, is nowhere near this.
What’s defensible about Anthropic’s revenue? It seems like OpenAI and others are equivalent. Open weight models are catching up. Google has ads networks, video platforms, and so much more.
I am skeptical that Anthropic and OpenAI can defend their dominance for long enough to make meaningful gaap accounted profits
Anthropic seems to have clawed its way to being the best AI and charging for itself. Microsoft had to slash the Anthropic budget… which it exceeded while being the exclusive host of OpenAI.
Google seems to have a good B2B and internal leveraging AI to make $. OpenAI/Microsoft seems to have squandered an early product lead.
And then you have the Muskiverse, where we have an rocket ship company that buys surplus cyber trucks, operates a space ISP, an AI company that produces virtual fetish porn and makes money renting GPUs to Anthropic, a rando dying social network and a tunnel company to cock-block public transit.
I may be underestimating the market for AI anime porn, but I think Anthropic is probably the best in class product right now. Google and AWS are probably the best positioned sellers of AI. SpaceXAI is the dark horse because they are likely enriching the dear leader more. OpenAI is fucked.
> an AI company that produces virtual fetish porn and makes money renting GPUs to Anthropic
Whatever Anthropic is paying is too much, since it means xAI will get to observe Anthropic's software, weights and operations in detail. It's probably contractually prohibited from doing so, but I doubt that would stop Musk, given what's at stake.
Anthropic is profitable unlike OpenAI though. Sure they'll owe a lot of money for probably decades, but if they remain profitable moving forward, it will be worthwhile.
That profit figure is a pre IPO marketing claim, not an audited and GAAP accounted number. And there is already a lot written about how Anthropic exaggerated revenue compared to OpenAI.
https://www.forbes.com/sites/josipamajic/2026/03/25/openai-a...
The question still remains whether they will be defensively profitable when things settle down.
I don't think open weight models are likely to overtake or match frontier models in the next year or so when it comes to doing the most difficult tasks, but I do expect a lot of people who are currently funneling wheelbarrows of money to Anthropic to realize that they can achieve the vast majority of things they are doing with LLMs just as well with much cheaper open weight models.
They will defend it the way any good monopoly always does: buying the competition. Case in point is Facebook: it is just a social network, the way they really stay on top is buying other companies and paying for people to spend even more time on their properties.
Looks like it'll be more like $2t
https://polymarket.com/event/anthropic-ipo-closing-market-ca...
So they're not just racing to gain dominance in AI, they're also racing to IPO before the music stops?
IPOing and getting a bunch of cash, even if your stock subsequently suffers in the crash, is a lot better than being unable to get that capital infusion before the house of cards collapses.
I don't think OpenAI or Anthropic are predicting that the AI market is going to collapse. In fact, I think both are bullish that the public still isn't pricing in exponential growth.
I think what is happening is that OpenAI is racing to IPO before Anthropic because their growth isn't as impressive. If you are the weaker company, you should IPO first to lock up the cash.
I can’t imagine them actually being bullish about exponential growth, when both seem instead to be stagnating. I’m more inclined to believe they’re just maintaining a level of hype in public because that’s what you do.
> when both seem instead to be stagnating
What's the evidence for Anthropic stagnating?
Oh, to be clear, I'm not saying there is evidence they're all a-okay. I just hadn't seen any evidence that they were stalling out. (I have for OpenAI.)
The same evidence that they are growing. Tea leaves.
What are they offering the public (not me and you writing code in our free time)?
They are offering the public an opportunity to become shareholders and they are giving their investors and employees liquidity.
Automating a large portion of existing white collar work, accelerating scientific discoveries, brain for robotics, etc. These are compelling offers.
"I think both are bullish that the public still isn't pricing in exponential growth."
So youre saying they will both become the economy whilst Google, Apple et al let them?
Man the idiotic statements on here are insane. Why do you fools pretend to know a subject well enough to spout such nonsense?
> youre saying they will both become the economy
They said exponential and you read unlimited.
An exponent on $1T isn’t unlimited, but it is an uninvestible thesis in my book.
The only reason I can think of for the accelerated S&P 500 inclusion of SpaceX is a pump and dump
> the accelerated S&P 500 inclusion of SpaceX
To be clear, S&P hasn't announced a decision on this yet.
Perhaps they’re afraid announcement would trigger divestment
I imagine the vast majority don’t care. All they care about is trying to hit their 401k or Roth IRA contributions for the month.
> Perhaps they’re afraid announcement would trigger divestment
S&P don't get a choice around whether they announce their methodology or not.
That said, the rule change at the NASDAQ 100 doesn't seem to have impacted pricing or allocation. I can't imagine that many people are that concerned about this. (I posted the public-comment request from S&P to HN [1]. The response was crickets.)
Better for whom?
The company. Worse for the investors. It's a classic bagholder play, but it can give the companies a comfortable runway post IPO.
Typically, you IPO when your private funding is drying up and/or some of your early lenders want to cash out.
> The company. Worse for the investors
It's worse for the new investors. (If it crashes.) It's great for the old investors. They got an opportunity to sell if they wanted. If they didn't, they still own their shares, except in a company that has that IPO cash sitting in its account.
> if it crashes, they get burned since they typically have blackouts post IPO
In the alternate timeline they would have held shares in a private company. They're still not really getting burned other than getting a tax bill.
I'm not sure how long we can continue being negative about these AI companies. This idea that there will be a crash has often burned the bears in a way that has become an Internet meme.
In reality, corporations as a whole are seeing record profits continuing through 2026. Whether or not the average person is doing well is pretty irrelevant to the stock market: if companies are increasingly profitable, stocks go up.
Everything I hear about Anthropic points to a company that is actually closer to profitability and possibly already profitable, unlike many of its other peers.
We don't really look at YouTube as a failure and that product was unprofitable for many years. Nobody thinks the Uber bubble is going to burst even though it has never made back its investment money.
I think OpenAI is undisciplined and poorly run hence the insane burning of cash. Sam Altman is a terrible CEO and a conman. Anthropic is run by legit people.
Companies like Google, Microsoft, and Meta face essentially no negative consequence for burning cash. They have no urgent need to be efficient about their AI investments, even if they could be.
SpaceX is of course not profitable and has a lot of baggage but they still have a major asset, which is that Starlink prints utility company levels of money and is expanding both customer base and profit margins rapidly. Are they overvalued? Yeah, of course.
People keep predicting "house of cards" and keep being wrong. AI bubble was supposed to burst as far back as 2023. When was the last time since 2009 there was a $500+ billion tech valuation that lost 90% or more? After a certain point , 100% market penetration is achieved and these products become mainstream and profitability follows. See Uber and Tesla for examples.
The old saying goes, the market can remain irrational longer than you can remain solvent.
I’m not necessarily expecting a crash any time soon. (But we average a major correction, what? every 8 years? So if you keep predicting one long enough you will eventually have been right all along.) But I do feel comfortable saying OpenAI and Anthropic are overpriced. For more or less the same reason Cisco was overpriced in the late ‘90s. It’s not that what they were making wasn’t valuable; it’s that we got out over our skis a bit over how much of it the world could actually manage to consume in the immediate future.
> After a certain point , 100% market penetration is achieved and these products become mainstream and profitability follows. See Uber and Tesla for examples.
Groupon got to pretty much 100% penetration, still crashed and burned right after IPO. I think Zynga followed a similar trajectory.
The headwinds are way worse now, though. Oil is choked, war is brewing, and corruption is at an all-time high.
Read history: people always think everything is fine ... until it isn't.
This is one of those arguments that is so vacuous you can apply it to anything and always be right.
> "There's no way you'll hurt yourself walking to the living room"
> "Read history: people always think everything is fine ... until it isn't."
And people are right most of the time. For every actual bubble, there are easily a dozen "bubbles" that aren't in fact bubbles.
Nasdaq is 5.4x higher now than peak dotcom.
So just buy the dip if it actually crashes.
> people always think everything is fine ... until it isn't
History is also replete with people constantly predicting collapses that don't come. Timing the market is very hard with numbers, it's total nonsense if one is just going off vibes.
> bank runs
Anthropic, SpaceX and OpenAI are not banks. (Also, we had the largest bank runs in American history three years ago. The ordinary American barely noticed.)
If note the dotcom boom lasted from about 1995 until 2000. Housing bubble longer. Theres no time table on when the bubble bursts, and the web didn’t die and neither did housing when the burst happened. It is just a reset and consolidation of overtly excessive speculation. It’s not like the bust leads to an end of civilization.
In 2004 people were predicting that the real estate bubble would burst and then nothing happened. Until it did.
The way I've been thinking about it: there is too much money trying to pour into the market. That's why valuations are so high.
Maybe getting more of these big private companies public will bring valuations down a bit.
(Just my impression. No math or financial studies behind it :)
> there is too much money trying to pour into the market
Keep in mind that inflation ran over 7% annualized in April [1].
The vast majority of that was fuel.
> vast majority of that was fuel
Everything else is up around 3% YoY. And if energy and transportation are up double digits, and producer prices are up double digits, other consumer prices will follow.
Yea and the cost of fuel has zero downstream effects on the economy.
From that doc, prices went up 0.6% in one month, multiple by 12 get 7.2% annual inflation rate.
Inflation is a measure of the cost of living. It's not got loads to do with large-scale, institutional investments.
> Inflation is a measure of the cost of living
The faster your cash loses value, the stronger your incentive to trade it for something else. That something else can be financial assets.
> It's not got loads to do with large-scale, institutional investments
For investors, particularly retail investors, the consumer price index is most relevant. But for whatever it's worth, producer prices are up over 16% in April (7% excluding "foods, energy, and trade services," which jumped over 50% annualized) [1].
To be clear, I'm floating a hypothesis here. I have seen no evidence linking inflation to demand for these companies' shares. (If anything, it should be the inverse.)
That depends. Inflation is a measure of the cost of living in terms of currency. It can be high either if goods and services required for living become scarce, or if currency supply increases. Currency supply increasing does affect asset prices.
Inflation then is already higher. Cost of living is driven mostly by rent
I'd say your sense is not wrong: https://www.thisamericanlife.org/355/the-giant-pool-of-money
No, the crash (that we all know is coming) will do that. Until then, history teaches that we'll just keep going up and up
This is one of those "everyone who dies, breaths air" statements.
It's frustrating people who parrot it think they're smart by saying it to others with no basis and finally when it does happen they're like SEE SEE!?
> Until then, history teaches that we'll just keep going up and up
And this is the more important part. As long as you're <40 you SHOULD always buy SPY or VOO, even at the very top.
People have been saying the crash has been coming since 2022. If you believed this and acted on it, you would've missed 3-4 +10%/yr returns.
As Buffet says: You can't time the market; be in it.
It doesn’t seem Berkshire is that much in the market right now.
Just to add some color using real numbers: Berkshire's Q1 cash pile was $397.4 billion, which is nearly 60% of its investable assets.
Right now SPY not be such a great idea with SpaceX launch upcoming since it will be included into it immediately. Retail investors will be bearing that particular flop's cost.
They haven't approved a change, but they have released proposals, which are tentatively to go into effect on June 8:
https://www.spglobal.com/spdji/en/documents/indexnews/announ...
I was old enough to remember the 08 crash. Then the market starting recovering in 2011/2012 and the sentiment was that the system would crash again soon like 08. Turns out, it was an amazing time to invest.
Post 08 crash, all sorts of conspiracy websites like Zero Hedge were popular saying how the world economy would keep crashing.
The only reason this happened was due to taxpayers bailing out financial institutions. This only exacerbated an insane amount of moral hazard already present in the market following previous bailouts.
Unfortunately, the US Government continued to run themselves into the ground spending-wise and may have a difficult time with another bailout, unless everyone pretty much agrees that we cannot have a USG failure, so they all pretend like nothing happened.
Eventually the merry-go-round stops, I'm just not sure what the catalyst will be, and it might be 100 years from now.
I am old enough to have had multiple career changes since starting on a major firm’s rates floor in 2008. These IPOs are tiny compared to the overall stock market and the stock market is absolutely tiny compared to debt markets. People consistently underestimate the size of the world economy or even their local economy. The world may look small from an orion capsule near the moon but almost every aspect of human society is bigger than most people can reason about. It is possible these IPOs have an outsized impact on sentiment for weird reasons. But it won’t be an actual outsized impact on capital markets.
Edit: I should add the AI bubble can absolutely burst but there is no reason to believe these IPOs are the end of the ride. If I knew I would be…
Without massive government intervention it probably would have
>And this is the more important part. As long as you're <40 you SHOULD always buy SPY or VOO, even at the very top.
But why? The US population is set to dramatically shrink in the next 30 years. Where does all the money come from?
One of my favorite phrases is “the market can stay irrational longer than you can stay solvent.”
Even if all signs point to impending doom, at the end of the day if people are still buying, stocks will hold their value.
no one is going to get wealthy buying SPY/VOO. you might get rich, but not wealthy. things have changed now in a sense that handful of companies are large percentage of the stock market to the point where one has to question why invest in “s&p 500” vs “s&p 25-ish”
while going with the tried&true makes some sense, I think we have to open our eyes to a different reality of our stock market… and this market concentration into few companies is going to get a lot worse…
you may be technically correct but today’s concentration in say top 10-15 companies is historic and by significant margin. I have been self-employed for a long time and somewhat “forced” into being “an investor” and starting in 2021-2022-ish I took my money out of all the “funds” … while I do not disagree that it is “a bet” - it is a calculated bet. things are different now even if historically you are right, no question
I very much disagree that it's coming. I think we need to completely reset our expectations of how the market works. There's been nearly an entire generation working in this "new" bull market, where things like EPS mean absolutely nothing and speculation no longer requires actual returns.
>I think we need to completely reset our expectations of how the market works.
Is this not just "It's different this time" thinking? I remember it being used all the time during the dotcom boom
> There's been nearly an entire generation working in this "new" bull market
You mean 0DTE babies?
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> the crash (that we all know is coming) will do that. Until then, history teaches that we'll just keep going up and up
Stock prices don't have to crash. They can just stagnate while profits catch up and multiples compress.
Debt binges, on the other hand, tend to go bust with a bang. But after the recent private-credit scare, the AI build-out has been predominantly financed with stock. (I think.)
Hasn't there been a _lot_ of debt to buy up Nvidia GPUs? I follow this stuff somewhat closely and it feels intentionally confusing, so I've likely lost track.
> Hasn't there been a _lot_ of debt to buy up Nvidia GPUs?
I believe that's been concentrated at the hyperscaler layer, and subsided when the aforementioned private-credit scare reared its head. (I haven't heard a big datacenter debt deal announced in a while. Though of course that doesn't mean they aren't being done.)
And we're still extremely compute constrained. We need more Nvidia GPUs, RAM, power.
> Equity bubbles don't have to crash. Prices can just stagnate while profits catch up and multiples compress.
Is there is historical evidence for that? As someone who used to follow Jeremy Grantham a lot (he considered himself a "bubble historian"), IIRC every bubble he studied always mean reverted, and it usually (maybe always, can't remember) overshot on the downside during the correction.
Yes, for equity prices in particular he talks about P/E ratios (among some other metrics like corporate profit margins), and so you're right, it would be possible for this to mean revert by prices holding stagnant and earnings catching up. However, as far as I can remember (primarily because a big emphasis of his was how unchecked bubbles can cause a lot of damage on the downside) all the historical bubbles he studied (something like 50) always crashed with a big price drop. Not 100% sure though, which is why I was curious if you had any contrary examples.
Corporations across the board are experiencing record profitability. That's the reason behind the high valuations.
This isn't true of AI companies...yet. But these are companies entering the market with pre-IPO userbase (including lots of B2B) numbers that Meta and YouTube would have dreamed of before their acquisition/IPO.
I think this whole situation is very sleazy and corrupt, but ultimately my prediction is that nothing serious will come of it. Even the exposure of index and passive investing is overstated.
There is nowhere else for that money to go
Net buying of corporate equities by American households, trusts, funds and non-profits has averaged $660bn per year for the last few years [1]. $200bn is not fundamentally a stretch for the American equity markets, let alone capital markets more broadly.
[1] https://www.federalreserve.gov/releases/z1/20260319/html/f22... line 16, 2023 to 2025
A 30% increase in one year, across only 3 companies, seems like a of a stretch. Especially given current economic/etc climates.
> 30% increase in one year
30% above the average. Households bought $1.6 trillion in Q3 of 2025, for example. (Foreigners bought a further $650 and $700 billion in Q3 and Q4, respectively.)
American capital markets are ridiculously deep.
> capital markets are ridiculously deep.
American market valuation is more than twice the entire US GDP. So ridiculous is a good description of what's going on.
> American market valuation is more than twice the entire US GDP
Stock versus flow.
A third of all spending is not fundamentally a stretch?
> A third of all spending is not fundamentally a stretch?
Where did you get spending? That's net buying of stocks by non-financial Americans. It's the new money that has, on average, gone into the U.S. stock market from that section of investors every year. A third of it going into these new issuances doesn't need to break anything.
Dumb question here, but would it necessarily mean the other stocks they might've bought (i.e. the rest of the market) will not get the cash infusion and will thus likely drop in valuation?
> would it necessarily mean the other stocks they might've bought (i.e. the rest of the market) will not get the cash infusion and will thus likely drop in valuation?
¯\_(ツ)_/¯.
Almost certainly, to some degree. But that doesn’t mean anything has to drop. Just not rise, or not rise as much as it would have. Or potentially some other company that would have gone public or sold shares doesn’t do it now.
> A third of it going into these new issuances doesn't need to break anything.
Other than it not going somewhere more productive. Are you willing to just bury 1/3 of your income in the back yard?
> Firms in the broad Russell 3000 share index have a total market value of $79trn
I sometimes try to get people to worry about the catastrophic state of American public finances by pointing out that the net national debt, including unfunded liabilities, is estimated to be $175T [0]. The government could appropriate all the equity from the top 3000 largest companies, and also the entire real estate market, and it still would not be able to pay its debt (RE market is $55T).
The $175T number is unfair because it treats Social Security and Medicare/aid as a liability instead of the service that they are. You might as well say the US is in infinite debt, because we'll always be paying something for our military every year, so infinity years * any dollars = infinite debt.
Also: All of those numbers you use to scare people are way, way off.
> it treats Social Security and Medicare/aid as a liability instead of the service that they are
It's a liability because the U.S. has promised to pay it. We haven't committed to a level of military spending backed by our full faith and credit.
EDIT: Never mind! Apparently we can just cut social security payments.
The NATO treaty says that we have to maintain our ability to resist armed attack, so there is some minimum. And we’ve made public commitments to spend at least 2% of GDP (though that isn’t part of the treaty).
SS and Medicare aren’t debts either in that sense. Congress can reduce benefits if they please.
In Flemming v. Nestor SCOTUS ruled that SS benefits are not guaranteed contractual rights but are instead statutory entitlements that Congress may modify or revoke.
Including all of the Social Security obligations for the current population is nonsense. For one it is money that will be paid from now for another ~60 years, and for 2 it's something that probably will just get cut as the trust fund starts getting into dire straits. It's not really an obligation if it's one act of congress away from being fixed (and without doing something like a debt jubilee that would destroy the dollar).
The rest of your article is complete bogus and the economic equivalent of climate change denial.
This misunderstands the power of monetization, or mistakes "dollars" having some kind of fixed "value." They do not. Whether one agrees with that or not, thinking of this as a "debt" problem where a hypothetical move is to appropriate equity- setting aside the fact that equity ALSO is not in a fixed unit of measure- anyway, thinking of appropriating equity to solve a public debt problem is a category error. That is how accounting works for business structures that exist within a monetary system but NOT for government and currency printers that define the monetary system. The MMT people are right about this. Public debt is a measure of private sector wealth. That is how the machine works.
The U.S. Treasury publishes a daily total of the national debt, which as of May 2026 was $39 trillion.
a little less than half of the total national debt is owed to the "Federal Reserve and intragovernmental holdings"
In December 2020, foreigners held 33% ($7 trillion out of $21.6 trillion) of publicly held U.S. debt
The thing is that at these levels of debt, repayment is never the goal.
Well, will be interesting to see how this play out. The US federal debt repayments is already above $1trillion a year.
Repayment isn't a goal that anyone in the system should reasonably want. Federal debt is not like credit card debt. Debt is a product that the US Government sells. Me, being a big corporation or human, go to the USG and say "I need somewhere to park my money that is safeish from inflation". The USG sells me debt at X.Y% interest. The money now generates safe interest, which means its safeish from inflation. A world where the USG "repays the debt" is a world where this essential product is no longer available.
High levels of debt only signals high demand for this product.
This is super-counterintuitive, but the debt has little to do with the deficit. We could run a surplus and still be in the same level of debt (in fact, this would be a tremendous place to be). We could run a deficit and have no debt (just print money, duh). The decisions that go into column A generally do not impact the decisions our leaders have to make in column B, though there are of course convenient relationships between the two.
> Repayment isn't a goal that anyone in the system should reasonably want.
Repayment to $0 isn't a reasonable goal but there are a lot of problems with your argument.
The biggest question is about sustainability. Is the debt-to-GDP ratio stable/manageable and is the interest rate on the debt below the economy's growth rate? If the answer is no, you have a problem.
> High levels of debt only signals high demand for this product.
This is backwards. The amount of debt is set mostly by government supply, which is driven by deficits. The demand signal is the price, which in this case is the yield. If the demand was high, yields would drop as the amount of debt grew. Instead, we have rising debt and rising yields, which means supply outstrips demand.
The US no longer has a AAA sovereign credit rating for a reason. When Moody's (the last agency to downgrade the US) stripped the US of its AAA rating, it cited "rising debt and interest costs 'that are significantly higher than similarly rated sovereigns.'"
The biggest issue at this point isn't the principal, it's the interest. Interest is the fastest-growing line item in the federal budget. It's almost at $1 trillion/year now and expected to nearly double by 2035. You either have to cut from other spending or borrow more to pay the interest.
Your comment implies that this doesn't have a real cost, which is silly.
How can you use a word like “never” when this debt is literally unprecedented in the history of the world
It can never be repaid. Presumably the people in charge of generating it are not oblivious to this fact.
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem."
It goes beyond that. $175 trillion includes all future entitlement spending not debt, it’s crazy to call all future entitlement spending for every living person debt. By that metric there’s essentially no such thing as a solvent government anywhere in the world and there never has been in modern history.
Government debt isn't like personal debt or business debt. The treasury can choose to not honur it, and there's nothing anybody can do about it. Of course they're not going to find a market to sell more debt to after that, but wouldn't you say they already have enough?
No sympathy for people and institutions who make deals with the devil and expect the government to forever enslave taxpayers to honour those deals and pay back with interest.
As mentioned defaults do shockingly little to change future funding. Its been years since i looked but its something like a few years of “cool down” on issuance and a few points of coupon premium. The economist has done some great, very accessible, articles on this over the years.
Second, its critical that treasury bonds are denominated in USD. The us gov controls the monetary policy and can choose to inflate away the debt over time. This is in contrast to EM debt where they get trapped with foreign denominated bonds. See also the tensions around EU debt, greece, etc.
> Of course they're not going to find a market to sell more debt to after that
Argentina is doing fine. The real constraint would be that defaulting on the debt would cause a credit crisis and bank collapses.
Pretty sure this is why the bankruptcy guy from NY was sent in
The way I understand my money market settlement account at vanguard, is that it's all, or nearly all, treasuries. Treasury not honoring government debt would be the worst bank failure in the history of the world.
We also don’t have anywhere near $175 trillion in debt. That’s a crazy made up number.
...what does this have to do with these IPOs?
From Matt Levine’s column today:
> The index demand is not 100% of the stock available in the IPO, or 110%, or even 50%. But it’s plausibly more than 25%. It’s not a short squeeze, but it’s a lot. Add a reported 30% allocation to retail, and arguably a majority of the IPO is being sold to price-insensitive investors. That is one way to get a high IPO price.
Is SpaceX going to eat Tesla? As in, are a bunch of Tesla investors going to be migrating across to SpaceX since that seems to be getting more of Elon's attention these days, especially with xAI barnacled onto the side of it?
The money to participate in the IPO has to come from somewhere...
Yes. Elon has a massive controlling share in SpaceX, complete control over the board. SpaceX will be double the size of Tesla after a successful IPO, then they can swallow it and then he has the control over Tesla he’s constantly fighting for.
I don't think the market will swallow the stock offerings until we see early signs of GDP growth attributable to these entities. But until then, I think the cost is higher than the benefit, which "The dead economy theory" essay covered it well [0]
> don't think the market will swallow the stock offerings until we see early signs of GDP growth attributable to these entities
Investors in these companies are going to be looking for revenue and pathway to profitability. I'm not sure anyone needs to see an impact on GDP to invest.
One other angle to think of is the midterm elections.
There will be chaos and potential stall for another 2 years following the elections and if the democrats win. There will be natural vested interest in showing economic decline or bad things to win next elections.
Both parties do it.
This is the best time to get to a safe place for all these companies.
No doubt these companies are woefully overvalued. But this won’t stop me from putting in orders for several thousand dollars of shares with at market open. There will undoubtedly be plenty of buyers and I expect them to gain rapid entry into the indexes which will unlock a flood of additional capital from 401ks and pensions
What a stupid proposition. The capitalisation has already flowed to theses companies through private means.
I am actually curious in knowing an answer to this: Does anybody think this is a good thing? A benefit to the world?
Not if anyone is cheating or scheming or being a rules lawyer, but is it good?
I expect it to be catastrophic or at least chaotic and we have removed our investments from the american market and untied ourselves from the dollar as best as we can. We are sitting this one out.
Feels more like: can the bond market handle any potential outflows as money is rotated into these IPOs?
> can the bond market handle any potential outflows as money is rotated into these IPOs?
Yes. Even if this capital is just rotated out of the equity markets, it would be fine. The bond markets are orders of magnitude deeper.
What is the value proposition for Space-X?
As far as I can tell it is in machines they cannot make work, servicing markets that do not exist for a service that will not matter for 20-years.
That and a third rate AI company that no body wants, except to get rid of.
This will probably go swimmingly at the start - but as time goes by and they raise more capital, Musk snorts more K and the glory fades, what then?
Can the stock market remain legitimate after such a brazen example of dumping? Regular everyday people can’t access private shares and participate in upside even if they want to. They don’t have the connections like VCs, and aren’t accredited investors. And companies ban secondary transactions, which should be forced by law to be always allowed.
And then after all that, the public have to deal with their index funds, ETFs, mutual funds, pensions, 401ks, etc buying up these overpriced stocks. You have a space company that also acquired a failing social media platform and failing AI company with little revenue justification for the valuation, and a lot of other obligations that make it financially a disaster (like payments owed for spectrum). And two frontier labs with no real moats, each looking for regulatory capture based on safety or ethics or whatever.
To the everyday person, the stock market after the fast listing rule, these three IPOs, and AI job loss, will feel no more legitimate than prediction markets or crypto.
> then they have to deal with their index funds, ETFs, mutual funds, pensions, 401ks, etc buying up overpriced stocks
Only about a third of American stocks are held by passive capital [1]. Out of that, index funds are about 16%, and most of those in America reference the S&P 500, which has not yet announced whether it is changing its rules.
Sure, but it's the Americans that can least afford to be stood up as exit liquidity that have the most exposure here relative to their net worth. The ultra wealthy are going to be heavily overrepresented in the active basket. Meanwhile the folks lower down on the income scale are more likely to have their money in passive funds.
What a headline
Why wouldn't it? There huge demand for these shares. It's not like $3+ trillion is dumped at once. It's a tiny percentage of it, and the high multiple does the rest of the work.
There was a huge demand for the World Online IPO in The Netherlands in the late 2000 bubble. Retail investors bought it thinking they got a unicorn.
Turns out it was a scam and shares fell on the first day. Soon after the entire bubble burst.
That said, I don't even see "huge demand" for the AI triocorns right now. Unlike in 2000, most people are skeptical.
World Online IPO
Meanwhile, Anthropic is adding ~$10-$15b ARR every month.
That said, I don't even see "huge demand" for the AI triocorns right now. Unlike in 2000, most people are skeptical.
How long have the SpaceX, OpenAI and Anthropic investors been waiting for an IPO (excluding tender offers)? 24 years, 10 years, and 5 years.
You really think they are going to hold off against selling for multi-millions for another year, especially SpaceX?
OpenAI (and especially) Anthropic are at risk from being undercut by the Chinese labs and their open-weight models and may cause their valuations to be questioned.
If that doesn't cause a correction, then SpaceX will do it for them. There is no lock up for the 5% of shares being available.
So what people seem to be unaware of or are purposely ignoring is that OpenAI and Anthropic have invested trillions in a rapdily depreciating asset. There was a HN post from a day or two ago where someone bought a V100 for 150 pounds and connected it to their computer. Well that was a $10k GPU in 2017. That's the fate of H100/B100 GPUs in 5-10 years (and I suspect closer to 5). What do you do if you've invested $1 trillion that will be worth $100 billion or less in 5 years? I think it'll be worse than that because modern hardware at that time will still probably be the same Wattage but have much higher performance so you'll be getting much higher performance-per-Watt and that's going to really matter.
The only company I'm confident will survive this hardware crunch and still be relatively successful in this space is Google.
OpenAI in particular is a bet that there will be an AI moat and that OpenAI will "win". I don't think there will be a moat and China is a big reason why (eg DeepSeek).
SpaceX is a little different. Yes, launching rockets is a business but it's not a trillion dollar business. 100 Falcon 9 launches doesn't even break $10 billion in revenue. Plus, Starship faces cost overruns, delays and significant headwinds.
But the real kicker is that SpaceX was used to bail out Elon from the Twitter purchase and the xAI investors from the first Twitter bailout. That's a problem because xAI is burning $1 billion a month in a company where that really matters and I don't think Grok will "win" here. Like, at all. SpaceX would be a significantly more attractive company without xAI.
The big potential growth area is Starlink. For that to justify this valuation I think you need handheld Starlink phones. That requires a lot of satellites at a relatively low orbit, which also means they have a relatively short life (because they burn up in the atmosphere). And for that Starship must succeed.
All the AI data center in space stuff is complete bullshit. It makes no sense. It'll never be viable. It's not going to happen.
EDIT: let me clarify because I was careless in my wording. So, Anthropic individually has not spent "trillions". That was more of a general statement on AI spending. Anthropic has raised ~$100B, the last round of which was $65B (at $965B post-money IIRC). This industry as a whole needs to recoup trillions.
Anthropic seems to be in a better position (as a business) than OpeNAI is but I do think the it's a race to cash out before depreciating assets, well, drepreciate and there's the real risk as compute becomes cheaper and the AI craze wears off, Claude just may not have the growth trajectory that is built into the price.
As I was reading the start of your argument, I thought you were gonna call the models a depreciating asset! Totally agree about GPUs too, but literally everything they’re spending money on has to be rebuilt to stay competitive. They have to go for the moonshot of training a full new model when better tech comes, they have to upgrade GPUs to keep their data centers efficient.
Technically, the model is a depreciating asset too. Just consider the difference between a model you need a B200 cluster to run vs one you can run on a Raspberry Pi. One's going to have a moat around it that gives it value and the other isn't. It's a hyperbolic argument to be sure but the nature of "enthusiast" hardware is that we're currently running, say, ~27B parameter models on hardware for a few thousand. What's that going to look like in 2 years?
Anthropic/OpenAI really need to train ever-bigger models to keep their moat. But that assumes there isn't a law of diminishing returns and also that a compressed model isn't sufficient for what many people need.
You mihgt say that the training is a barrier. And it is, kind of. Notice how it's Chinese companies coming out with open-source models like DeepSeek and Qwen? That's no accident. As soon as DeepSeek came out I knew what was going on: China is going to make sure no single Western company "owns" AI. It's in their national interest for that not to happen.
I wouldn't be surprised if the rush-to-IPO is motivated, at least in part, by getting ahead of Chinese AI commoditization.
> What do you do if you've invested $1 trillion that will be worth $100 billion or less in 5 years?
I think the aim would be to generate at least $900bn of cash flow from those assets.
"OpenAI and Anthropic have invested trillions in a rapdily depreciating asset". Anthropic raised a bit over 100B and has 47B ARR. Where are you getting trillions from ?
Starlink Mobile (i.e. Starlink direct-to-cellphone without modifications) is already happening, and fast. Phones that have the recently announced Qualcomm X105 modem will support Starlink Mobile 5G at speeds up to 150Mbps, direct from satellite. The Qualcomm X105 modem will be in most Android flagship phones coming later this year, and by 2027 most new phones will support Starlink direct-to-cell. The next iPhone that supports the 3GPP Rel-19 standard will too.
The rollout relies on Starlink V3 sats, which can only be launched Starship, but Starship progress is going well and is already able to deploy satellites from orbit. SpaceX is capable of launching Starlink V3 on the current iteration of Starship, but they want more testing. We'll probably see Starlink V3 launching late this year or early next year.
Source on the trillions invested?
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So, The Economist's paywall is unbypassable?
Download the Bypass Paywalls Clean browser extension.
https://en.wikipedia.org/wiki/Bypass_Paywalls_Clean
The project has been going on for years, it moved to gitflic after being banned from github and gitlab.
Amazing! Thank you!
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YCombinator News is like the Soviet Union?
In the YCombinator the news plays you.
> All three benchmarks are now structured to buy SpaceX at IPO pricing
S&P has not finalized a rule change yet.
Ill bet all the decision makers wives have suddenly come into some nice island property recently though
You're claiming without evidence that the bureaucracy and regulators are corrupt to the core? No way I refuse to hear another bad word about the government, they are above reproach sir.
I was a lawyer in 2008 representing banks in the financial crisis. Multiple bankers wives set up companies to by mortgage backed securities using government loans and government guarantees on payment upon default. That let the banks get the toxic mortgages off their balance sheet.
These wives were yoga teachers and socialites. And I say that as a man that is a feminist and upmost respect for the amazing women I have worked with that were absolutely world renowned professionals. The bankers wives were not in that category and were shells to eliminate the “conflict of interest”. The CEO of Goldman Sachs did this. You can find the records if you want to be on a government watch list.
To be fair, these are not regulators, just private companies making up rules, so technically this is not corruption just something that looks like it but it's just business™
These are all private companies's decisions.
At least a new Cybertruck.
If you have evidence of corruption, present it. Otherwise it's just generic cynicism leading to a thought terminating cliche.
At this point in US regulatory oversight I would have a harder time finding evidence of no corruption.
Because they think that a lot of people will want to get in on the historically massive and well-known companies, which would lead to outflows if the index doesn't pick them up fast enough?
> Why else would they change the rule ?
These indices aim to replicate the market. They’re not trying to pick stocks.
There is a serious argument for saying they fail to replicate the market if they structurally exclude trillions of dollars of it.
I think deep cynicism is the correct mindset to have in the current financial/political climate.
;)
Do you think it’s more or less likely that they will make the same change as the other benchmarks?
> Do you think it’s more or less likely that they will make the same change as the other benchmarks?
S&P has historically been more conservative. My personal guess is they won't adopt all of the proposals.
> they’ll adopt some of these proposals that are in the benefit of these companies IPOing at the expense of large funds?
Yes. And I see the argument for it. It’s hard to claim you represent the market if trillions of dollars are outside it for no reason other than newness or capital-structure weirdness. (I agree with excluding unprofitable companies.)
If the S&P adopt those rules would there be any index fund that is S&P without the new rules?
Are you actually optimistic?
> Are you actually optimistic?
Not particularly. When I posted the request for comment to HN it got crickets [1].
Not enough people care about this. And the "safe" option has kind of shifted with the other index providers having moved first. That said, there were a lot of proposals and I'm not expecting all of them to be adopted.
[1] https://news.ycombinator.com/item?id=48054324
There's no obviously correct answer here.
A: posted a fact
B: but what about your emotions
Very glad to see HN stereotype being upended :)
A: This has not happened yet. B: Are you actually optimistic that it won't?
That's a request for an opinion, not an emotion.
>and cut the seasoning window from 90 days to 5.
90 days or 5 days, it doesn't really matter because the float will be tiny due to the 6 month lockup. What kind of price discovery are we expecting that would happen in the other 85 days?
If it does not matter, then don't change it.
The indexes are weighted based on the float (at least most of them)... so a small float means they will buy a much smaller number of shares.
I think that's the point the parent comment was making.
> it doesn't really matter because the float will be tiny due to the 6 month lockup.
Not really: https://www.reuters.com/legal/government/spacex-allow-early-...
SpaceX is slowly and steadily increasing the float over the first 6 months by having a rolling end to the lockup. The only major cliff will be Elons shares
I don't like this either, but from the article:
> Although Nasdaq has already shortened the “seasoning” period before index inclusion to 15 trading days and FTSE Russell has slashed its waiting time to five days (and S&P Dow Jones is reportedly considering something similar), most share indices weight firms in proportion to the value only of shares they have released for public trading (the “free float”). For SpaceX, this means just the $75bn or so of stock it intends to issue in June—so its initial weight in the S&P 500 will be around 0.1%. The NASDAQ 100 is an exception, and has changed its rules to weight companies at up to three times their free float, in an apparent effort to woo Mr Musk. Even so, SpaceX’s probable initial weight in this $40trn index will still only be around 0.5%.
So people who hold ETFs that track the S&P 500 probably don't have too much to worry about. People invested in the NASDAQ 100 probably have more to be outraged about - but then again I suppose if you're invested in the NASDAQ 100, you may be consider more exposure to SpaceX to be a good thing.
Do you have a source for the $30 million claim? It'd be nice to work out the math. Not _all_ of 401k funds / index funds are going to go to SpaceX.
> Do you have a source for the $30 million claim?
Index funds in total had about5 $7 trillion in 2021 [1].
[1] https://alexchinco.com/double-what-you-think-it-is.pdf
*trillion
The 12 largest companies in the USA together have that market cap, so probably not.
yeah, trillion. 30m isn't even a vapor droplet.
You forgot the part where NASDAQ already enacted a rule change that normally prohibits small floats from index inclusion (and thus forced purchase by index funds), which was normally 10% [1]. SpaceX is only floating ~4.3% of their stock and they're triple-weighting it.
[1]: https://www.forbes.com/sites/garthfriesen/2026/04/25/spacex-...
Also worth asking what SpaceXLAI's plan is to make money. $22.7T of their $28.5T Total Addressable Market is... Drumroll... Enterprise AI! That's the plan, that's what we are investing in: spacex and Tesla and Twitter are all side shows, to sell AI. That's what everyone's absurdly overpriced forced passive investment is going to. https://bsky.app/profile/segyges.bsky.social/post/3mnan7hr2j...
There is nowhere near enough burning rage for this absurd fleecing of the public.
AI in space, for all that sweet sweet latency.
Space is not far away at all.
It's not only Grok, but also the robotics applications.
So... The US GDP in 2024 (the last one I found) was $27.8T...
They are planning to capture 100.7% of it?
So the obvious thing to do, for someone that's got ~$3mm to play with, is to setup an ETF that is SP500 but with the old rules. If you can convince $40mm of other people's money to go into your not-specifically-Musk-less-but-just-happens-to-be ETF, they'd come out ahead.
The S&P Shariah index fund is required to exclude SpaceX and already exists https://www.spglobal.com/spdji/en/indices/equity/sp-500-shar...
Looking at their exclusion criteria, which one do you believe it falls under?
Why? Was space exploration incompatible with Sharia? Is it the pornography bit of xAI?
Why would a Shariah index fund have to exclude SpaceX?
Only $3mm needed?
this is disgusting corruption, a direct wealth transfer from the many to the few. shame on everyone involved
We need the opposition taking names for investigations in 2029. They're not all getting pardons.
The opposition you're talking of will hold no significant power in 2029. They currently hold a minuscule amount of power and this isn't going to skyrocket within 4 years. A meteor causing an extinction event is more likely and I don't think you're expecting that.
They're just as on the take as anyone.
Think about it: you have hundreds of thousands of pages of evidence that the hyper-wealthy may have trafficked minors across state and international borders. Only one person is in prison over it, and her cell gets upgrades.
35 years ago this would have been a slam dunk for the opposition party of any republic. Instead of standing ten toes down on it, opposition leaders are doing... what exactly? Going on with business-as-usual, for the most part. They should be attempting to add language to every single bill that comes across the floor to see more done. They aren't.
I think stock trading shenanigans are far lower on the list of moral outrages, particularly given Congress' predilection for insider trading.
> this is disgusting corruption
The guy called 401(k)s a Ponzi scheme. Now, he's coming after them to loot.
Wow, didn’t know that.
If SpaceX tanks and 401ks are left holding the bag, this could result in the biggest class action lawsuit ever.
Oh, SpaceX already has that covered: thanks to the TX legislature, SpaceX shareholders cannot file shareholder lawsuits, you can only complain to the "Texas Business Court" or get binding arbitration [0].
[0]: https://www.bloomberg.com/opinion/newsletters/2026-05-21/spa...
People can surely sue the index publishers for removing the safeguards, or the index funds to take more risks than they were mandated.
When money is lost in the order of billions, someone is getting sued.
Will take 6+ years and lots of fees lost to recover loss. Won't be anywhere close to made whole.
This is optimistic about binding arbitration providing protection from more traditional remedies
why? the cards are on the table. If you buy a turd from me after I disclose the composition, that is on you
You can't sell these ETFs without incurring capital gains, potentially large. So it isn't really a choice.
> Just today I rebalanced my retirement funds away from large cap stocks
Away from large cap stocks to what?
How is that their problem? That is an issue between you and the government.
Sure, the problem is trust.
Regular people want to invest so they can make money and companies want people to invest so that they can raise money. So pretty much everybody wants the 401k money to be invested in the stock market.
But the issue is that investing in the stock market is very technical, so some smart asses invented the index funds to make it easy for daddy and mummy to put their retirement accounts to work.
The index has safeguards in place to try and reduce its volatilty. So people are happy, cause they are investing in stock without having to look closely at what it is they bought.
But if suddenly some people change the safeguard rule, so that their buddy can dump their overvalued stock over people who think they are investing relatively safely, then it can be argued that there is foul play.
People are not finance specialists and they are heavily incentivized to buy index funds, so they need to trust that the people who are telling them to invest are not hiding things from them. If that trust is broken, lawsuits will follow.
It’s like: imagine you own a Toyota and have a maintenance contract with Toyota, and one day you have your car serviced and they tell you they changed the brakes. They tell you the brand of the new brakes and they tell you it’s fine while in fact, they put some cheap garbage that fail after 100 km of driving.
When the brakes fail and your car falls off a cliff, you go and see them and they tell you: “yeah those brakes were bad, but we told you we put them in, you could have looked up that these were bad, it’s all over the internet, so that’s on you”.
> People are not finance specialists and they are heavily incentivized to buy index funds, so they need to trust that the people who are telling them to invest are not hiding things from them. If that trust is broken, lawsuits will follow.
A "lawsuit" isn't a concern for the likes of Musk.
He's got the money to pay lawyers, politicians, and influencers. He's spread this risk around to the right people; if he goes down, they're going down with him, too.
At a certain point you have to start jailing people for long periods of time. I don't mean the Milken, Belfort, or Skilling treatment. I mean being placed away for 30+ years in medium-security facilities at the least.
If this is a bubble... The pop stage will be devastating...
Listen to the author of “A Brief History of Financial Bubbles” argue why it probably isn’t a bubble:
https://api.substack.com/feed/podcast/260347/s/233172.rss
https://podcasts.apple.com/us/podcast/conversations-with-col...
https://open.spotify.com/show/0Cj2lIpGxkrw1RFVIPTa6a?si=f41c...
Can you please summarize his argument?
You mean "Listen to [someone who started on Wall Street at Lehman Brothers, joined PayPal in its earliest days and worked alongside Peter Thiel and Elon Musk, and eventually became a venture capitalist in Silicon Valley] argue why AI probably isn't a bubble".
Funny how this different framing of the exact same person provides a completely opposite expectation of their incentives behind commenting on whether AI valuations are a bubble.
We don't let bubbles pop anymore. We print money and borrow from the future so that no one loses money on their homes and retirement accounts. The GFC changed the rules.
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except the last bubble pop hit fast and hard with post covid inflation.
It worked. The only people upset about it are young people who don't vote. If young people don't want a continual wealth transfer from them to the old, they need to start voting. That's been the case since 2008, and here we are a generation later.
It’s never going to happen because too many people want it to happen.
> If this is a bubble... The pop stage will be devastating...
Why? It could be sudden. It could be slow and gradual. I've seen no reason it needs to be one versus the other.
Irrational exuberance rarely transitions to a rational drawn down. The minute the first selfish-actor flood-liquidates, everyone else will too. That's now runs work.
but this isn't "irrational exuberance", literally everyone I know paying and kind of attention has "rational dread".
Somewhere safe. Gold, usually.
I heard daffodils are where it's at.
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I mean, isn't the definition of a bubble that it pops quickly? If it slowly loses value over time, its not really a bubble.
Is there any definition of bubble that doesn't involve popping? That's literally the metaphor.
> We have no fundamental reason current valuations have to collapse suddenly.
I would agree, but i think that is just saying that the current situation is potentially not a bubble. Which may be true. We will only find out after the fact.
Because it is deliberately extracting cash from Mom and Pop into the robber baron's wallets?
Where were you in 2008?
Because traditionally the pop is delayed while those who realized most of the gains attempt to offload the risk to other parties. Whether this works or not at some point it becomes an inevitable and self reenforcing feedback loop.
Just investing less in risky things on the run up means you personally perform worse so even in known bubbles you don't see reasonable slow downs instead of disastrous pops.
Not related - many robber barons went bankrupt in the severe economic crashes of the time, such as the Panics of 1873 and 1893. The Gilded Age continued despite bubbles popping.
I mean if the blow back wasn't so horrible for a lot of people, I kind of respect just how creative the pump is on this one.
The wrong lessons were were learnt in 2008 after no individual suffered any negative consequences for their part in causing horrible losses for a lot of people.
There is literally nothing creative about circumventing existing regulations. By definition of there already being rules in place to prevent them, the pump methods being used are already a known quantity. That those safeguards are being bypassed is just boring old corruption.
One thing I have come to realize, is that worrying about bubbles will keep you poor.
If everyone is in the bubble and it pops, everyone is in the same boat, so you’re not really going to be poorer than your peers by comparison.
If it’s not a bubble and you are wrong, you will fall way behind everyone else and just watch people get richer and richer doing the exact same thing you should have done.
Also, just because something is a bubble doesn’t mean it has to end in a devastating pop. Sometimes bubbles expand and then just get diffused. The exponential rise stops and prices plateau, but it just becomes a new normal and things stagnate for a while before resuming normal upward growth.
Ask Warren Buffet how concerned he was of "missing" on bubbles... He got richer than pretty much everybody else by just avoiding bubbles and then buying assets at fire sale prices when they inevitably popped.
This is such a scam.
SpaceX used its massive IPO and listing fees (and the prestige of being the largest IPO ever) as leverage. Index providers and exchanges saw financial incentives: listing fees, trading volume, data sales, and long-term revenue from asset managers. Reuters reported that SpaceX advisers contacted major index providers (including Nasdaq) to discuss early index entry, and that SpaceX was leaning toward listing on Nasdaq only if it got early inclusion in the Nasdaq 100.
The rules built to protect passive investors were waived:
- S&P 500’s 12-month seasoning and 4-quarter GAAP profitability requirement → waived
- Nasdaq’s seasoning window (90 trading days) → cut to 15
- FTSE Russell’s seasoning window → cut to 5 days
Meanwhile, Danish pension fund excludes SpaceX citing governance and valuation (Musk holds approximately 42.5% of the equity, but commands roughly 83-85% of total voting control): https://www.reuters.com/legal/transactional/danish-pension-f...
> S&P 500’s 12-month seasoning and 4-quarter GAAP profitability requirement → waived
S&P hasn’t announced a final rule change yet.
Yeah, right.
Are you seriously under the illusion S&P is second guessing or reconsidering its plans? There's no evidence of that.
And CRSP (VTI)
People buying into space x are basically telling Musk to do anything he wants with their money, no questions asked...