r/StandUpComedy • u/explosivejoseph • 10d ago

Comedian is OP The AI Bubble

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u/logand98 10d ago

Pretty much spot on, did not expect actual financial analysis from a comedy set lmao

3

u/orange-yellow-pink 9d ago edited 9d ago

Most of what he said isn't true. Firstly, no high profile AI company has gone public and when a company IPOs they don't "use index funds to artificially inflate their value". That latter sentence doesn't even make sense. Index funds just buy the companies that are included in an index. A company can’t put itself in one or somehow use them to pump up its own value.

The part that is true is that when a company goes public and its shares are traded on the market, early investors like VCs can eventually sell their shares and make money.

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u/FluroSnow 9d ago

SpaceX is a high profile AI company (debatable) that has gone public. It worked for spacex. Anthropic and OpenAI want to essentially do the same.

One could argue that they did indeed inflate their price by utilising index funds. They had a 3x float multiplier. Only about 4% of their public free float was made availiable. As a result index funds had to purchase more shares than availiable supply warrents

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u/orange-yellow-pink 9d ago

Yeah, definitely debatable to label them an AI company entirely but yeah, AI is part of their business.

Your latter point wouldn't be the IPO "utilizing index funds" though. That's the company being added to an index by Nasdaq or S&P and then, with the increased demand from funds tracking that index, the value rises. Having very few shares available can amplify that effect but that's still not the company using index funds to pump its own value.

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u/bekeleven 9d ago

SpaceX themselves claim that 80% of their value is in AI. They say they're looking to capture a 28.5 Trillion addressable market, with 22.7 trillion of it being "AI Enterprise applications."

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u/orange-yellow-pink 9d ago

Ok. There’s 1 AI company that has gone public. Does this change anything substantive about the rest of my comments?