Latest / In the Loop AI / Everyones Losing Their Minds Over The Stock That Gets You Anthropic, OpenAI, and SpaceX

Transcript

Everyones Losing Their Minds Over The Stock That Gets You Anthropic, OpenAI, and SpaceX · In the Loop AI

0:00
Josh: Just last week, on March 19th, a fund called VCX was listed on the New York
0:03
Josh: Stock Exchange at $31 per share.
0:06
Josh: Less than a week later, just this morning, it hit $575.
0:09
Josh: That is an 18 times gain in just five trading days. And the underlying portfolio,
0:13
Josh: it's only worth about $19 per share.
0:16
Josh: But those $19 include Anthropic, OpenAI, SpaceX, Databricks, Anduril.
0:21
Josh: It's a 30 times premium on the actual asset. So we have to ask ourselves the
0:25
Josh: question, has the market lost its mind or is it telling us something.
0:28
Josh: Is this actually an opportunity? This story is pretty outrageous.
0:31
Ejaaz: This is the most insane IPO or direct offering story ever. This fund,
0:37
Ejaaz: Fundrise Innovation Fund, has a genius strategy.
0:39
Ejaaz: So like you said, they own Anthropic, OpenAI, and a bunch of other top AI companies,
0:43
Ejaaz: but their stock actually gives you access or exposure to these underlying companies.
0:48
Ejaaz: So if we look at some of the percentages, Anthropic, they own 20% of the fund
0:53
Ejaaz: is positioned in Anthropic.
0:55
Ejaaz: 17.7% of the fund is positioned in Databricks, 10% in OpenAI,
0:59
Ejaaz: 7% in Anduril, 5% in SpaceX.
1:02
Ejaaz: Basically, all the big hitters that are private AI companies that are,
1:06
Ejaaz: most of them actually presumed to IPO this year, they already own and give you
1:10
Ejaaz: access to via their stock VCX.
1:13
Ejaaz: And the trajectory has been insane.
1:15
Ejaaz: Like you mentioned, they went public six days ago.
1:18
Ejaaz: Within the first day, their stock price went from $19 to $125. dollars.
1:23
Ejaaz: Four days later, it hit $350. And then just this morning, it hit $575,
1:28
Ejaaz: which values them at $19 billion. Just insane.
1:32
Josh: Yeah. And it's a testament to, I think, how much market demand there is for this stuff, right?
1:36
Josh: Like when you think about your dream portfolio, all the stocks that you want
1:39
Josh: to own, this is pretty much everything.
1:41
Josh: It's the top AI labs. It is the top space company.
1:44
Josh: All of them, like you said, are going public. And this chart is outrageous.
1:47
Josh: I mean, Just this morning, it hit 575.
1:49
Josh: It's cooled off now to only be 394. We have to ask the question, is this insane?
1:54
Josh: Is this a testament to what's coming for the IPO market? I guess if people are
1:58
Josh: interested, how can they participate in this? There's a lot of things we need to unpack here.
2:02
Ejaaz: So before we actually tell you how to get access to this thing,
2:04
Ejaaz: I want to break down their positions a bit more because I think their investment
2:07
Ejaaz: strategy is pretty genius.
2:09
Ejaaz: So if we look on the right side of the screen here, we have a sector breakdown.
2:13
Ejaaz: This is from their official website, which explains the reasoning behind why
2:16
Ejaaz: they bought these particular companies.
2:18
Ejaaz: 43% of the fund is invested in artificial intelligence.
2:22
Ejaaz: So that's the actual model frontier AI labs. You can find that in Anthropic and OpenAI.
2:28
Ejaaz: But then a bunch of their fund, 23% of the fund is invested in data infrastructure.
2:33
Ejaaz: Now data is an extremely core part of AI. If you don't have good data,
2:37
Ejaaz: and if you don't have a lot of good data, you can't really train good models.
2:40
Ejaaz: You've got compute on one side and then data on the other side.
2:43
Ejaaz: So their investment in Databricks is actually super smart in that way.
2:46
Ejaaz: But then they also invested in aerospace.
2:49
Ejaaz: And it's not like a small position either, like 5% of the fund is in aerospace.
2:52
Ejaaz: So with a $650 million nav, that's like not insignificant.
2:56
Ejaaz: And they're choosing SpaceX, which as we know, probably going to be IPO-ing
3:00
Ejaaz: as soon as potentially the next couple of months and are launching data centers into space.
3:05
Ejaaz: So they're also thinking forward as well as currently what the major AI labs
3:09
Ejaaz: are. But then there's also some interesting investments in gaming.
3:13
Ejaaz: I noticed that they have a 3.5% position in Epic Games, who just did mass layoffs
3:19
Ejaaz: at their company just yesterday.
3:21
Ejaaz: And although that's not really great news, typically when a company does layoffs,
3:24
Ejaaz: it makes them leaner and boosts the valuation.
3:27
Ejaaz: Epic Games is still a private company, but is one of the biggest gaming IPOs
3:31
Ejaaz: that are presumed to go ahead this year.
3:33
Ejaaz: So they've really picked and chosen their companies very strategically here.
3:37
Josh: It's a good portfolio. And the price action reflects that. I think I need to
3:41
Josh: instill some FOMO. Again, this is not financial advice. At this point,
3:44
Josh: this is just outrageous to buy into.
3:45
Josh: But it is fun to look at the day-by-day insanity so we can kind of evaluate
3:49
Josh: how much interest there really is about this stuff.
3:52
Josh: On the first day when it opened at i think it was 31 it closed at 125 so it
3:59
Josh: was already up like 300 and then by day two,
4:02
Josh: it was up to just about $200. By day three, $315.
4:08
Josh: And then by day four, it hit $575. With the market cap surging well past,
4:16
Josh: I think $15 billion for something that's worth just about $650 million.
4:21
Josh: So you're trading these things at about 30 times what they're actually worth.
4:25
Josh: You're essentially spending $575 for $19 worth of Anthropic and SpaceX and OpenAI.
4:30
Josh: This is crazy. So why are people doing this?
4:33
Josh: Like, what is the actual cause? I mean, at this point, you have to assume maybe
4:36
Josh: it's just a penny stock GameStop situation where people want to just pump something.
4:41
Josh: But there was some truth to this, right? It's like, there has been this IPO
4:45
Josh: drought that we've had over the past few years where all of these companies
4:48
Josh: are creating a tremendous amount of value.
4:50
Josh: Every day we talk about three companies, right? It's like, we're talking about
4:53
Josh: Anthropic, we're talking about OpenAI.
4:55
Josh: Google is publicly traded, but SpaceX isn't. And a lot of the companies are
4:58
Josh: creating all of this value.
5:00
Josh: There's trillions of dollars sitting in private assets that the public doesn't have any access to.
5:04
Josh: The only way you could do this generally is to go through a third-party vendor
5:08
Josh: who sells these things called SPVs and you could buy shares within them.
5:11
Josh: But it's not a real legitimate way of getting on the cap table,
5:15
Josh: getting real shares. It's not great. So clearly people are desperate.
5:18
Josh: This is the first real instrument that I've seen to find product market fit.
5:23
Josh: There are a few others. I know ARK Invest has one that's not publicly traded.
5:27
Josh: I know you could buy into it quarterly and you get your quarterly dividends
5:30
Josh: but there are some experimentations just this very clearly is the biggest winner so far.
5:35
Ejaaz: It's a mixture of extreme and maybe treacherous financial engineering,
5:40
Ejaaz: as well as desperation for the retail market to get access to these companies.
5:44
Ejaaz: It is no secret, like Anthropic, OpenAI, SpaceX, Anduril, all these companies
5:49
Ejaaz: are massively drooled over by
5:52
Ejaaz: the retail market, but no one can get access into any of these companies.
5:55
Ejaaz: And the major issue with private market valuations is typically they would achieve
5:59
Ejaaz: a reasonable valuation and then IPO and give retail access. but now private
6:04
Ejaaz: valuations just keep going on and on and on. I mean, look at Uber, look at Stripe.
6:08
Ejaaz: They have remained private for years now and their valuations are extortionate
6:11
Ejaaz: and we don't know if they're ever gonna want to go public because they just
6:15
Ejaaz: have so much cash to spend on their existing business.
6:18
Ejaaz: So the incentive to give retail access isn't really there but the financial
6:22
Ejaaz: engineering is kind of crazy.
6:23
Ejaaz: So only 10% of their shares are publicly available for float to purchase right now.
6:29
Ejaaz: So the market is actually pretty illiquid. for the investors in the fund that
6:34
Ejaaz: purchase shares before the direct offering, they're kind of locked up right now.
6:39
Ejaaz: But I see that the lockup is probably around six months, which actually isn't that long.
6:44
Ejaaz: Typically, it's like a year and then like a cliff after that.
6:47
Ejaaz: So you're going to have a lot of this shares or the float increase pretty drastically after six months.
6:53
Ejaaz: So there is a lot of financial engineering that's going on here.
6:56
Ejaaz: To your earlier point, there are some similar funds that have launched recently
7:00
Ejaaz: that are similarly structured like this.
7:03
Ejaaz: The most obvious one probably being Robinhood's Venture Fund One.
7:07
Ejaaz: And if I look at that stock chart right now, I've got to pull it up.
7:12
Ejaaz: It didn't fare well after the first month.
7:15
Josh: No, it did horrible. And I think the reason why is because it's missing those crown jewels, right?
7:19
Josh: When you look at the portfolio, what it's made of, it has boom aerospace,
7:23
Josh: it has, I believe, Databricks in there. It has really impressive companies, but it's missing.
7:28
Josh: The spacex it's missing the anthropic it's
7:30
Josh: missing the open ai it doesn't have those companies
7:34
Josh: that really everyone wants and it seems like the
7:37
Josh: world really only wants these three things yeah and if you don't have that included
7:40
Josh: you're not going to get reward for it and that's what happened with the robin
7:43
Josh: hood fund now there is something that i do want to talk about briefly because
7:47
Josh: anytime an asset goes up 18 times in five days you have to start asking the
7:53
Josh: question how close are we to the top here.
7:56
Josh: Like I know a lot of people listening to the show, they've been in the crypto world for a while.
7:59
Josh: They've seen this happen many times. And we must ask the question to our Oracle
8:04
Josh: here at Polymarket, what is the chance of a recession?
8:07
Josh: Just out of curiosity, because generally this type of frothiness begins to happen towards the top.
8:13
Josh: And thankfully, Polymarket is saying the chances are actually kind of low,
8:17
Josh: 35%. Now, granted, these have come up over the last few weeks from 20% to 35%.
8:22
Josh: So this is a 35% and climbing.
8:24
Josh: But still, there's only a one in three chance, according to the very brilliant
8:28
Josh: people at Polymarket, who are saying that we'll even have a recession.
8:31
Josh: So that does make me feel good. I think it feels hard to imagine the AI bubble
8:35
Josh: kind of exploding prior to these IPOs actually happening.
8:39
Josh: This can get us into our next news of the day about SpaceX. Thank you,
8:41
Josh: Polymarket, for sponsoring this section of the episode.
8:43
Josh: But SpaceX, we just heard news from yesterday that their IPO is actually far
8:47
Josh: closer than we think. They just filed...
8:50
Josh: The rumors are that they are going to be filing officially as early as next week.
8:55
Ejaaz: Yeah, exactly. So there's a bunch of rumors that broke out today.
8:58
Ejaaz: And actually, just this morning, rumors broke out that Goldman Sachs might be
9:02
Ejaaz: actually leading the entire IPO.
9:05
Ejaaz: So once they file, it's pretty much confirmed that they're going to be IPO-ing relatively soon.
9:10
Ejaaz: The rumored date is, I think, June or July of this year.
9:14
Ejaaz: So happening pretty quickly. and they're going to be raising a staggering $75
9:19
Ejaaz: billion and will value them at IPO at around $1.75 trillion.
9:27
Ejaaz: Now, earlier Polymarket that we looked at, I believe had the odds of them going
9:32
Ejaaz: above $2 trillion by the end of the day, pretty high, like 52%,
9:37
Ejaaz: I believe, I was looking at it earlier.
9:39
Ejaaz: So this is going to be one of the biggest IPOs of the year, but it begs the question, Josh,
9:43
Ejaaz: What is that going to do to Fundrise's stock price, right?
9:48
Ejaaz: Like if SpaceX does go public, I know they only own only 5% of their fund is actually in SpaceX.
9:54
Ejaaz: But if people can get access to SpaceX publicly, why would they own Fundrise's stock?
10:00
Ejaaz: Now, maybe it's because they still want to have exposure to Anthropic and OpenAI.
10:04
Ejaaz: But the point is, as these companies IPO and Anthropic and OpenAI,
10:07
Ejaaz: by the way, are rumored to also IPO this year, I don't see the value of their stock keeping up.
10:12
Josh: Yeah, well, I can't see it keeping up even today. Like, I would be shocked if
10:16
Josh: by the time we publish this episode, the price is still high.
10:19
Josh: Because I mean, this is just an unbelievable premium. And I can't in good conscience
10:23
Josh: recommend anybody go and buy the stock at this premium.
10:25
Ejaaz: No.
10:25
Josh: But it is, I think, more than anything, a testament to the demand.
10:29
Josh: So when SpaceX does IPO, I mean, that $2 trillion number is outrageous.
10:34
Josh: That would have been the most valuable company in the world not too long ago.
10:37
Josh: And that's what they're going to launch at.
10:39
Josh: So I think it's just a testament to how much demand there
10:42
Josh: is for this new paradigm of company for the spacex
10:45
Josh: for the open ai for the anthropic and how big of a deal it is going to be once
10:49
Josh: they actually go public it's looking right now based on the general timelines
10:52
Josh: that if they do file next week it's going to be an early june early to mid-june
10:56
Josh: ipo for spacex yeah and i'm i'm putting my money on june 9th which is six slash nine.
11:05
Josh: I think just mimetically speaking, very strong. But yeah, I think it's...
11:10
Ejaaz: Yeah, actually so, right? What do you think is the over-under of Fundrise being
11:15
Ejaaz: above its peak that it reached today?
11:17
Ejaaz: 575 bucks by the time SpaceX IPOs?
11:21
Josh: Oh, 0%. This thing is worth $19. I mean, that's what this is worth.
11:25
Josh: It's worth $19. It's not worth $575.
11:28
Josh: Everything on top of it is just hype and craziness and insanity.
11:33
Josh: Sure, there does deserve to be a premium on this, right? It's because you get
11:35
Josh: private access to, or you get public access to private shares,
11:38
Josh: but that premium should not be 30 times. I mean, that's just crazy.
11:42
Josh: Particularly because, I mean, the fund, what, has 5% SpaceX allocation?
11:45
Josh: So as we begin to wrap up this episode, I think if you're not buying this crazy
11:49
Josh: premium priced asset, how can you actually responsibly get exposure to these companies?
11:54
Josh: And there are a few answers that are pretty interesting. The first one being Google.
11:57
Josh: We always talk about Google on the show. We love Google here.
11:59
Josh: And Google is actually a majority shareholder of SpaceX. They own a ton of shares for a public company.
12:05
Ejaaz: Yeah, I think they own around between 7% to 10%, which is nuts.
12:08
Ejaaz: But also Amazon is the other company, right? They own about,
12:11
Ejaaz: I believe, 17% or actually 22% of Anthropic.
12:15
Ejaaz: So these are publicly traded companies, arguably more robust and stable than
12:21
Ejaaz: Fundrise's latest IPO or DPO.
12:24
Ejaaz: So it might make more sense to own
12:26
Ejaaz: these companies to get exposure to the potential biggest IPOs this year.
12:30
Josh: Yeah, I mean, Fundrise, the fund has 20% exposure to Anthropic,
12:34
Josh: Amazon has just about the same amount, except they own the actual equity on
12:38
Josh: the cap table in a meaningful way.
12:40
Ejaaz: Wait, wait, wait. There's an important distinction here. Fundraiser's fund has
12:45
Ejaaz: 20% of the fund positioned in Anthropic, but Amazon owns 20%.
12:51
Ejaaz: Actually owns 20%. They're very, very different things. Much bigger position in Amazon. Yeah.
12:56
Josh: Yes. And I think Amazon is a really interesting company too,
12:59
Josh: as we head into IPO season, because they stand to benefit from all of the headwinds
13:03
Josh: of this on the robotics front, where we see humanoid robots.
13:06
Josh: What is their primary use case right now?
13:08
Josh: Working factory, sorting packages. We see the like,
13:11
Josh: All of the Anthropic annual run rate doubling every couple of months.
13:15
Josh: They're making a tremendous amount of revenue.
13:17
Josh: They'll start to get close to what Amazon is doing if they continue to grow at this rate.
13:20
Ejaaz: Well, there's also Amazon's AWS business, which inferences most of the AI queries that are sent.
13:28
Ejaaz: Like all of Claude's stuff gets sent to AWS servers.
13:31
Ejaaz: OpenAI is structured to deal with them, which they're launching soon.
13:34
Ejaaz: All of like Google stuff also kind of routes through them as well.
13:37
Ejaaz: So they're just a beast and people are valuing them as a retail e-commerce platform,
13:44
Ejaaz: which is still the most ridiculous thing ever.
13:46
Ejaaz: Look at Amazon's next quarterly earnings. I'll bet you now that AWS revenue is through the roof.
13:52
Josh: And crazy breakthrough that we might have to talk about. We'll definitely be
13:55
Josh: talking about on the roundup tomorrow.
13:57
Josh: But Google just released this unbelievable paper that shows how they're able
14:00
Josh: to compress these models, use what, six to eight times less memory and still
14:05
Josh: get the same output with no loss.
14:06
Ejaaz: But also 8x faster. So you could have the same number of GPUs,
14:11
Ejaaz: but run a Frontier model eight times as fast just because they wiped out memory. It's just insane.
14:15
Josh: So now Amazon Web Services, because far more powerful, I mean,
14:19
Josh: GCP becomes more powerful with Google. everyone is just becoming far more powerful.
14:23
Josh: And what's interesting about Google and Amazon is they both have their specific
14:26
Josh: TPUs or accelerated GPUs that they're using that are kind of out of the NVIDIA sphere.
14:32
Josh: So there's a lot of bullish catalysts that are coming.
14:36
Josh: As we wrap up, maybe we could talk about just a few ways that you can actually
14:39
Josh: get exposure to these companies, because I've spent a lot of time trying to
14:42
Josh: acquire shares. There's really three.
14:44
Josh: You go to a company like Forge Global or Hive, or there's a few others,
14:49
Josh: and this is by no means an endorsement.
14:50
Josh: I i haven't used them but they offer these spvs you
14:53
Josh: can go in a lot of times the minimum investment size is like 25 50
14:56
Josh: 000 you can try to get access to these shares at a premium but there's pretty
14:59
Josh: high fees it's not the best way of going about it the second way is you can
15:03
Josh: just buy into these funds like vgx from fundrise and they give you public exposure
15:08
Josh: i know arc invest has a fund that's very similar where it's not publicly traded
15:12
Josh: on a daily basis but you can collect quarterly dividends,
15:14
Josh: And then the third way is just getting exposure through the publicly traded
15:17
Josh: companies that have exposure, like Google, like Amazon.
15:20
Josh: That's probably it. And then we just hope that all these companies will go public
15:24
Josh: and create true alignment, because that's not fair.
15:26
Josh: Anthropic wants to align everyone, but what about the financial alignment,
15:29
Josh: dude? They're just raking in all the cash and not giving any to us.
15:32
Ejaaz: There actually is a fourth option, in my opinion, which is you can just wait
15:36
Ejaaz: for these companies to IPO.
15:39
Ejaaz: I do think a lot of them can IPO this year and relatively soon.
15:43
Ejaaz: We've got SpaceX that might IPO in early to mid-June.
15:47
Ejaaz: And then Anthropic and OpenAI are kind of racing together right now to IPO by the end of the year.
15:53
Ejaaz: OpenAI yesterday announced that they shut down Sora and are condensing and rediverting
15:58
Ejaaz: compute and team resources to build the best coding and chatbot LLM.
16:03
Ejaaz: This isn't insignificant. The
16:05
Ejaaz: reason why they're doing this is they're prepping themselves for an IPO.
16:08
Ejaaz: Anthropic's doing the same thing. They're on track for, I believe $80 to $100 billion ARR this year.
16:13
Ejaaz: So all the numbers look great, and they want to go public as soon as they can. So
16:17
Ejaaz: Maybe the best strategy is also to wait. You can see where the public values these companies.
16:22
Ejaaz: You can buy it maybe not on the first day, but second day, third day or fourth day.
16:25
Ejaaz: But also these companies could shoot up. So if you do see a good opportunity
16:29
Ejaaz: to get access to, you know, the SPVs or through Fundrise, as Josh just mentioned,
16:33
Ejaaz: just be aware of the risks before you do so.
16:36
Josh: And I think that wraps up the episode today. I mean, it's just a crazy story
16:38
Josh: that's happening right now with this fund of going 18x.
16:41
Josh: It's just a testament to how crazy the rest of this year is about to get with
16:46
Josh: all these companies going public.
16:47
Josh: Um, I am not participating. EJS, do you have any interest in participating in this?
16:51
Ejaaz: I will not be. No, hang on. Let's, uh, let's do one final check.
16:56
Ejaaz: And Josh, we are at 422, close to 420. It's up 35%.
17:00
Josh: So by the time this episode goes live, is it higher or lower? What are we thinking?
17:04
Ejaaz: Okay. Uh, I think it's higher because I think the hype will catch on for a couple more days.
17:09
Josh: That's my bad. Okay. Well, I, I cannot advise anyone touch this with anything
17:13
Josh: more than a hundred foot pole,
17:14
Josh: but that is the episode today just
17:17
Josh: a fascinating story i thought it was really fun to just check in share
17:20
Josh: this like crazy news catalyst that's going on how to get exposure
17:23
Josh: if you are really curious and what the likelihood is that we're in
17:26
Josh: a bubble which is lower than i think most people expect so all good things happening
17:29
Josh: here if you enjoyed this episode please don't forget to share it with your friends
17:32
Josh: um comment on youtube give us a five-star rating subscribe to our sub stack
17:36
Josh: where we publish newsletters twice a week they're very helpful very informative
17:39
Josh: and yeah thank you so much for watching and we'll see you guys in the next episode see you guys.