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 Landscape
Tier 1: Foundation Model Companies
- OpenAI: $150B+, ChatGPT, GPT models, Microsoft partnership
- Anthropic: $30B+, Claude, safety-focused, Amazon/Google backing
- xAI: Musk-backed, Grok, rapid scaling
Tier 2: AI Infrastructure
- Databricks: $43B+, data + AI platform
- Scale AI: $14B+, data labeling and AI infrastructure
- Hugging Face: $4.5B, open-source AI hub
Tier 3: Vertical AI
- Runway: Video/creative AI
- Harvey: Legal AI
- Glean: Enterprise search AI
Why AI Stays Private
AI companies are staying private for specific reasons:
Capital Availability
Microsoft, Google, Amazon are pouring billions into AI. No need for public markets.
Rapid Change
AI is evolving so fast that quarterly earnings pressure would be counterproductive. Private status allows long-term thinking.
Competitive Secrecy
Public filings reveal too much. Better to stay private and not telegraph strategy.
Valuation Flexibility
Private 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 Routes
Employee Secondary
Buy shares from employees on secondary markets. OpenAI employees have had multiple tender offers. High minimums ($50K-$1M+).
Fund Investment
Some funds specifically target AI pre-IPO. Higher diversification but also higher fees.
SPV Structures
Pool capital with other investors to meet minimums. SPVs are common for hot deals.
Tokenized Access
Platforms like IPO Genie are building access through token-gated deal flow. Lower minimums, transparent governance.
The Bull and Bear Cases
Bull case for AI pre-IPO:
- AI market will be $1T+ annually
- Foundation models have winner-take-most dynamics
- Current valuations could look cheap at IPO
- Private markets offer access before institutions crowd in
Bear case:
- Valuations are already rich ($150B for OpenAI)
- Technology could commoditize faster than expected
- Regulatory risk (AI safety, antitrust)
- Competition from open-source and big tech
The investment decision ultimately depends on your view of these factors and your individual time horizon.
Positioning for AI
If you believe in AI, options include:
- Direct pre-IPO: Access specific companies through secondary or SPVs
- Infrastructure picks: Companies that benefit regardless of which AI wins (data, compute, tooling)
- Platform access: Use platforms providing diversified deal flow
- Public 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 Questions
Q: 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.
