The most important technology shift of our lifetime is happening in private markets.OpenAI: $150B+ valuation. Anthropic: $30B+ valuation. Neither has had an IPO.By the time these companies go public, early investors will have captured the majority of returns. For everyone else, there's still an opportunity - if you know where to look. Our beginner's guide to pre-IPO investing explains how to access deals like these.
The AI Pre-IPO LandscapeTier 1: Foundation Model CompaniesOpenAI: $150B+, ChatGPT, GPT models, Microsoft partnershipAnthropic: $30B+, Claude, safety-focused, Amazon/Google backingxAI: Musk-backed, Grok, rapid scalingTier 2: AI InfrastructureDatabricks: $43B+, data + AI platformScale AI: $14B+, data labeling and AI infrastructureHugging Face: $4.5B, open-source AI hubTier 3: Vertical AIRunway: Video/creative AIHarvey: Legal AIGlean: Enterprise search AI
Why AI Stays PrivateAI companies are staying private for specific reasons:Capital AvailabilityMicrosoft, Google, Amazon are pouring billions into AI. No need for public markets.Rapid ChangeAI is evolving so fast that quarterly earnings pressure would be counterproductive. Private status allows long-term thinking.Competitive SecrecyPublic filings reveal too much. Better to stay private and not telegraph strategy.Valuation FlexibilityPrivate valuations can be adjusted without public market scrutiny. Useful in volatile markets.The result: the biggest AI returns are being made in private markets. The same dynamic played out with SpaceX's early investors who captured 100x.
Access RoutesEmployee SecondaryBuy shares from employees on secondary markets. OpenAI employees have had multiple tender offers. High minimums ($50K-$1M+).Fund InvestmentSome funds specifically target AI pre-IPO. Higher diversification but also higher fees.SPV StructuresPool capital with other investors to meet minimums. SPVs are common for hot deals.Tokenized AccessPlatforms like IPO Genie are building access through token-gated deal flow. Lower minimums, transparent governance.
The Bull and Bear CasesBull case for AI pre-IPO:AI market will be $1T+ annuallyFoundation models have winner-take-most dynamicsCurrent valuations could look cheap at IPOPrivate markets offer access before institutions crowd inBear case:Valuations are already rich ($150B for OpenAI)Technology could commoditize faster than expectedRegulatory risk (AI safety, antitrust)Competition from open-source and big techThe investment decision ultimately depends on your view of these factors and your individual time horizon.
Positioning for AIIf you believe in AI, options include:Direct pre-IPO: Access specific companies through secondary or SPVsInfrastructure picks: Companies that benefit regardless of which AI wins (data, compute, tooling)Platform access: Use platforms providing diversified deal flowPublic proxies: NVIDIA, Microsoft, Google (but miss the private market alpha)Timing matters in AI investing. Enterprise AI adoption is accelerating rapidly, with companies across healthcare, finance, legal, and logistics integrating AI into core workflows. This wave of adoption is driving revenue growth at private AI companies far faster than previous tech cycles. The window for pre-IPO access is narrowing as these companies approach profitability milestones that typically trigger IPO timelines. Investors who position now, while the sector is still largely private, stand to benefit from the valuation re-rating that occurs when these companies transition to public markets.$IPO's AI-powered deal scoring can help identify quality opportunities in the AI space and beyond.Related: Pre-IPO Investing | AI-Powered Scoring
Frequently Asked QuestionsQ: When will OpenAI IPO?Sam Altman has discussed it but no timeline. Could be 2025-2027. The company may restructure from nonprofit/capped-profit model first.Q: Is it too late for AI pre-IPO?For the largest companies at current valuations, upside is more limited. But there are still earlier-stage AI companies and infrastructure plays with significant opportunity.Q: How risky is AI investing?High risk. Technology could shift, regulation could change, and competition is fierce. But the upside in a transformative technology is also highest early.
