Andrew Feldman rang the opening bell at the Nasdaq MarketSite on May 14. Cerebras Systems, the wafer-scale chip company he co-founded in 2016, had priced its initial public offering (IPO) at 185 US dollars a share the night before. The stock opened at 350 US dollars. By the close it was up 68 per cent, valuing the firm at almost 95 billion US dollars on a fully diluted basis. It was the largest IPO by an American technology company since Uber went public in 2019.
On May 22 OpenAI filed a confidential S-1 prospectus with the SEC. Goldman Sachs and Morgan Stanley are advising on the deal, which targets a public debut in the autumn at a valuation that could reach one trillion US dollars. SpaceX submitted its own draft registration statement on April 1, aiming for a June listing at a reported 1.75 trillion US dollars, what would be the largest IPO in history. Anthropic, the maker of Claude, retained Wilson Sonsini, a Silicon Valley law firm with a long IPO docket, against a possible listing later in the year. The company is in talks to close a 30 billion US dollars funding round at a 900 billion US dollars-plus valuation in the meantime.
OpenAI’s prospectus reports that the company is burning 1.22 US dollars for every dollar of revenue, even as that revenue runs at 25 billion US dollars a year. SpaceX paid 60 billion US dollars in stock to acquire xAI in February, and the merged business now generates around half its revenue from Starlink, with a fast-growing artificial-intelligence (AI) arm of its own. Anthropic’s run-rate revenue tripled in the second half of 2025, to over 30 billion US dollars, helped by enterprise customers including Netflix and L’Oréal. Eight of the Fortune 10 now use Claude.
Irrational exuberance
Pierre-Olivier Gourinchas, the IMF’s chief economist, warned in October that the surge of investment in AI risked creating a technological bubble. Jamie Dimon, the chief executive of JPMorgan Chase, told Bloomberg Television from Shanghai on May 21 that markets were showing “too much exuberance”. Alan Greenspan, then the Federal Reserve chairman, used the phrase “irrational exuberance” in a speech in December 1996, four years before the dot-com crash. Michael Burry, of Big Short fame, has compared the AI-led rally in semiconductors to the run-up to March 2000.
Torsten Sløk, chief economist at Apollo Global Management, published research in July 2025 arguing that the top ten companies in the S&P 500 were more overvalued than the top ten had been in the 1990s. The Shiller cyclically adjusted price-to-earnings ratio for the index has since reached 41, the second-highest reading in 125 years of data. Only the dot-com peak of 44 was higher. Five companies now account for almost a third of the S&P 500. Capital expenditure by the big cloud providers on data centres is on track to exceed, on an annual basis, the 500 billion US dollars that telecoms firms spent on dark fibre between 1999 and 2002.
Cisco Systems, the company whose routers wired the internet, overtook Microsoft as the world’s most valuable public company in March 2000, at a market capitalisation of 579 billion US dollars. The shares peaked two days later. Over the next two years they lost 80 per cent of their value. Cisco only regained that 2000 high in December 2025.
Jensen Huang, the chief executive of Nvidia, used his appearance at the World Economic Forum in Davos in January to push back. He told Larry Fink, the head of BlackRock, that high capital spending reflected “the largest infrastructure build-out in human history”. Nvidia, Microsoft, Alphabet, Amazon and Meta produced enough operating cash flow in 2025 to fund their AI commitments from earnings. Anthropic reported in April that more than a thousand businesses were spending over one million US dollars a year on its services, double the figure of two months earlier.
Morgan Stanley estimated in October that American retail investors had pumped 700 billion US dollars into equities since the start of the year, roughly five times faster than during the dot-com run-up. The OpenAI book will go mostly to institutional clients of Goldman Sachs and Morgan Stanley. Elon Musk has reportedly reserved up to 30 per cent of the SpaceX offering for retail buyers, three times the usual share.Feldman’s shares dropped 10 per cent on May 15, the day after the bell-ringing. By May 22 they had fallen a further 8.6 per cent, to 269 US dollars.
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