He told us why this matters for everyone.

For the broader economy, this will most likely be the largest initial public offering of all time.

And if you've got kind of any mutual funds or index funds, et cetera, at some point you're probably going to be exposed to this because it's going to be one of the largest companies and it'll be in all the indexes eventually.

And then more broadly, this is kind of a referendum on AI as a business.

And that might be a little unfair.

This is one company, one offering.

But what happens here, success, failure, something in between, is going to get viewed by a lot of people as an indicator for where the AI market is going.

Three years ago, the company's annual revenue was $41 million.

So they're looking to raise a ton of money, kind of emphasizing, as I was drawing out there, the reason why so much capital might be both useful to the firm and might still generate a return for a company that could be $2 trillion at the IPO.

Yeah, it's interesting.

This is one of those S1s.

Obviously, whenever we look back at numbers, that's not necessarily precedent for what's going to come forward.

But I think Anthropic's kind of saying, hey, we've shown you the last six months.

Kind of forget about that.

We're about to spend an enormous amount on compute.

So I'm just curious if you think they can overcome kind of the bad PR that they've had for a while coming into this.

So, you know, talk a little bit about Anthropic being cash flow positive and sort of it is all the compute, the money that they're spending on compute factored in that doesn't seem like it.

No, it doesn't seem to.

And the compute spend is complicated when you go through the S-1 a little bit, because so much of what you have to think about as a prospective investor, if you care to really be doing this as a traditional investment, not just a momentum play, is the contracts going forward, right? It's the compute spend that they have pledged over the next six months, year, two years.

I think that in the S-1 goes out to the end of 2028, I think is maybe the longest.

So it's a little hard to figure that stuff out.

So you've got what they spent in the first six months, great.

But with these companies, and when you look at the way the revenue is growing, the way the business is growing, the way the valuations are growing, I think the the trailing indicators are almost become irrelevant.

um eventually dan does the you know they have to like make a profit and you know start start uh being able to fund being self-sufficient and be able to fund um these investments out of the money they're making or can this you know sort of treadmill go on forever

But again, that, that traded highly volatile after its debut.

I think SpaceX has been highly volatile.

Part of it, relatively low float.

Obviously, the, the lockup, the first lockup expired.

And, and SpaceX has not been a very good, well-performing IPO post-IPO, right? The IPO itself was gangbusters, was a lot more than anybody thought, but the shares are trading below the IPO price.

They're trading well below the first trades.

So really almost anyone who bought it in the public markets or on day one is underwater on that.

I'm still trying to understand.

But what is it and why is it being approved when he is in office?

Yeah, so the operate part that Liz Warren said, I'm not so sure.

But so basically, yeah, it was a crypto project created a couple of years ago.

There's been a lot of coverage of it.

It was basically created by Trump's sons and actually by one of Steve Witkoff's sons.

Steve Witkoff was kind of the envoy to everything for the Trump administration, former real estate guy.

Again, it was a crypto project.

What is the premise behind this, and how does this save journalism jobs?

Dan Primack, what are your thoughts?

Uh, my big thought, and he just said there's room to catch up.

My big thought is this went so smoothly.

As Cramer said earlier, there's now a playbook for OpenAI and Anthropic, right? They may raise more, they may raise less, but, but they're gonna be similar in terms of size, in terms of valuation probably, and in terms of the amount of money raised.

And a big piece of that was start early, right? SpaceX and Goldman started talking to investors back in January, kinda testing the waters, and had to keep talking to them, right, because things kept changing, the xAI acquisition, the quasi acquisition of Cursor.

Start early and keep telling the story, and I, I think given that you've got a lot of the same banks, obviously they're gonna be involved next time.

We now have a playbook wh- and, and because things just went so smoothly, also including the exchange.

So I, I would wonder if in that way we can't necessarily think that it, it would be able to be as, as smooth as this one.

Explain a little bit more what he's doing, by the way.

Sure.

So, so what Trump has been doing-- So this started-- There was something, I don't know if you remember, a couple years ago called the CHIPS Act.

This was under Biden and Gina Raimondo, the former governor of, uh, Rhode Island.

Uh, and the CHIPS Act was basically this idea of, oh my goodness, the United States doesn't actually make any chips anymore, any semiconductors.

It's all made overseas, and we need those for everything, our cars, our phones, et cetera.

Let's onshore it.

Yes

Do you share those concerns?

I really don't.

Uh, I, I kinda went into the numbers and looked back at 2021, and this is in the Axios Pro Rata newsletter today.

2021 was the all-time record for US IPOs in terms of proceeds.

And if you kind of look out and you assume, which is a big assumption, that SpaceX could raise $80 billion and that Anthropic and OpenAI could raise about the same, you're not really seeing, when you compare it to the overall market capitalization, the public equities market capitalization, which has gone up so much since 2021, it's not that much more.

I, I really believe the public markets can swallow this, and I think as evidence of that, you've got six different companies right now that are on IPO roadshows.

If they were really worried about people holding onto dry powder, they'd, they'd be holding back right now.

And the, the more interesting dynamic to me is, you know, are people getting in because they don't wanna miss out? Or are they getting in because they feel like they have to because of some of the fast track changes being made to include these companies in the major averages?

They're also in a rivalry to go public and be the one to tell that AI story, and that could be coming along with SpaceX and Cerebras, and I guess Cerebras is telling us there's plenty of investor appetite for all of this.

Uh, Cerebras is definitely telling us that.

Like, right? And, and, um, Brad talked about the timing, or Scott talked about the timing being so good.

It really is.

This is a chip company.

You know, when this thing originally got funded as a startup a decade ago, venture capitalists wanted almost nothing to do with chips, let alone memory chips.

There had been a bunch of memory chip failure companies.

Are- aside from OpenAI and Anthropic, are there other companies waiting in the wings to go public here, or i- is- are these just a couple of unicorns?

So can we expect the back half of this year to actually see a pickup in activity, even with growth slowdown concerns and, of course, a midterm election cycle coming up?

Yeah, I, I think we can.

You know, again, things slowed down a little bit with Iran, although it's picked back up again.

Again, we're up in the US, I think it's about 50-something percent this year over last year, which again, was the first part of the Trump administration, so it's not like you're comparing Biden to Trump.

It's over Trump, and, and I think the United American thing is kind of instructive.

Not...

You know, everything Phil said was correct about kind of the, the consolidation a- and the market share, but what's notable is that Kirby floated it directly to Trump, and I think that shows kind of this new world in which everybody understands that antitrust now is top-down.

What exactly does it say, then, about this particular administration and its future, I guess, anti-monopoly type behavior, its regulatory behavior, if in the beginning, when President Trump was first going through the election cycle and got elected this time around, that there was a perceived benefit to companies because of a more relaxed regulatory environment? Has that played out largely in your mind, or will it play out differently in the coming months, given what we've seen from the administration so far?

Yeah.

Uh, you know, I, obviously again, you know, you, on the federal side, you know, it's interesting.

It, it's not just Calci fighting back against these lawsuits.

The CFTC itself, uh, there's three states, Arizona, I'm gonna mess up the other two.

I think Connecticut is one.

There were three states who have tried to ban Calci, and the CFTC itself has come in to sue.

So I could see the FCC coming in to try to sue i- if such laws were passed.

Sure.

And without further ado, we are joined by Dan Primack.

Primack.A legend From Axios.

Dan, how you doing? Hey.

What's going on? Good.

How you guys doing? We're doing fantastically.

Thank you so much for taking the time to come- Doing- ... hang out with us ... great.

Long- Thanks for having me ... long over- Long overdue ... long overdue.

Um-

Uh, i- is, uh, is part of this story the fact that there is more warfare happening in the world?

Part of it is there's more, uh, warfare, more defense spending in the US, right? If you look at the, if you look at the, what most people view as the tax break bill, the big beautiful bill that got passed last year by Congress and the Trump...

and signed into law by the Trump administration, huge increase in defense spending.

So there's that.

There's a recognition that, uh, that new technologies, just like they're trans- uh, you know, transforming every other part of our society, also can tran- transform what were kind of some staid, uh, weapons.

And, and you wanna keep up, obviously, with the other countries and, and your adversaries.

But look, yes, we are fighting more than we have before in the US, and our allies are.

I- is this not becoming a, a, a larger story in Silicon Valley, and is that a new paradigm?

Um, I, I hope they win.

I mean, look, Goo- Google's, Google's the, the mo- the fascinating one, right? Because just a couple years ago everyone's, you know, "How could Google have lost the, the race here?" And suddenly Google's very much in the race, and it, it is probably the biggest rival to OpenAI.

Anthropic's a little bit of a different case, much more of a B2B company than a B2C even though obviously u- usage has gone way up over the last couple weeks amongst consumers.

Look, it's a duopoly, but you're talking about this massive underlying technology.

Uh, you can easily have two players.

This, there's no particular reason why this has to be winner-take-all.

Um, as we look at the massive fundraising rounds that are going on here and kind of the arms race that is taking place, um, is it just gonna be an IPO market for, for who, for what? SpaceX for the rest of the year, Dan? With how many IPOs have been pulled in the meantime, this is, this is carnage for all the names that were supposed to be going public.

It has been lately.

Dan, what do you make of Fortune's opening?

It's not surprising.

You know, tough day to go out.

Right.

And this is kind of is a tough week.

And this is maybe the busiest week back to 2021.

I think there's supposed to be eight IPOs and U.S. exchanges this week, 100 million or more.

You say the market, though, is open and ready to digest bigger offerings?

Dan, does it become much more buzzy next year?

I think so.

And I think, as Leslie said, I think you're going to see more of these deals.

I mean, it's worth noting Medline was kind of exceptional in private equity terms anyway, right? This was a deal that was done in 2021.

It was a return of so-called club deals.

I believe it's the largest health care leverage buyout ever.

So it's a very large deal.

Now that this has gone out successfully, what's it going to mean for the rest of the kind of private equity space and those pipelines?

Can the market digest that?

I think the market can digest it.

And what's ironic about it is, and it's a little tricky because they're talking about the back half of next year.

As you said, Musk, you know, who knows what Musk will do and where the markets will be at that point.

We'll obviously be around the midterms.

What's interesting about those, Two big drivers of IPOs.

One is venture capital investors, the limited partners and funds desperate for cash and desperate for liquidity and pushing for it.

So what would you caution people as we will continue to get various reporting on how big it could be and biggest ever or not biggest ever and how much they're going to raise and how much that, you know, what should we be listening for?

Any, any, uh, initial thoughts on this deal?

Well, I mean, from Kimberly-Clark's point of view, even though their investors hated this deal today when it got announced, the, the strategic rationale does make a certain amount of sense, right? Kimberly-Clark is known for selling things like Huggies and toilet paper and, and it wants to move into or expand into health and wellness, particularly as Americans get older.

So that makes sense for them, kind of, you know, own the entire life cycle.

That makes sense strategically.

But there's these massive litigation risks, which is what I think, uh, the, the investors were freaking out about.

Not just Tylenol, but also some old talc lawsuits that are tied to J&J.

As you mentioned, Kenvue spun out of it a couple years ago, but it remains on the hook for those as a defendant in lawsuits, not just in the US but also in Europe.

Are there any antitrust concerns here? Is that something that we should be looking at?

I mean, what's the process by which we have to worry about stuff getting really stalled out?

I think we need to wait a few days, maybe a couple of weeks.

Right.

Because there's no particular reason for most companies why they need to go public in Q4 as opposed to Q1.

You know, if they're so long as they've got all their internal stuff ready to go and their bankers, et cetera, they could obviously wait a couple of months, January or February or fine months to go public historically.

So I think this is really going to be companies waiting, watching.

Is this one of these shutdowns? And we've had a bunch of them the last, you know, 28 months.

It feels as if there's a sort of stampede to get in through a narrow door, and then they bleed lower.

Is this really a framework, or is there a deal? Y- your sense is there is actual paperwork and a signature is incoming?

I think there's probably two parts.

There's probably some sort of memorandum of understanding, which would be the framework, and then the actual, all the details have to get finalized.

Uh, as of this morning, a senior White House official was acknowledging, uh, that the final price isn't necessarily determined yet.

The final cap table for TikTok US, i.e. who all the investors are and what stake they'll all own, that's not entirely determined yet.

And even potentially, the US government is not gonna take equity, they're not gonna have a board seat or have a so-called golden share, but they are gonna get the equivalent of kind of a banker fee for this, a finder's fee, and that doesn't seem to even be determined yet.

So, I think memorandum of understanding, but then Trump is signing a new executive order to kind of kick the can another four months.

(laughs)

Dan, what do you think? The market is more receptive this time around, even if valuations have changed over time for Klarna, huh?

Yeah, look, I think the markets have actually been receptive for a while.

I think you've had companies that have been a little scared to go out.

You know, even if you look last year when there were relatively few IPOs, the ones that went generally performed well.

The ones that went earlier this year, you know, there was that stoppage after the tariff announcement, the Liberation Day thing, including Klarna.

But a lot of the other companies that had been planning to go public back in April ultimately did and have mostly been successful.

But as you said, five companies launched their roadshows this morning.

We haven't had it.

But what What if this does lead to some decrease in business from international customers feeling they can't trust Intel?

I mean, for Intel, I mean, for starters, Intel didn't need to, quote, be bailed out, or at least not in the same way that, say, automakers needed to or savings and loans did years ago, right? Intel was still a big company.

It had a lot of challenges, but it wasn't talking about going bankrupt tomorrow if it didn't get some sort of bailout for the government.

And remember, Intel had been granted most of this money already via the CHIPS Act, but it had chosen not to take it, namely because it didn't have a place to put it, particularly into its foundry business because it didn't have enough customers for that.

And there doesn't seem to be... any strategic piece to this deal, right? The White House has already said it's not going to lean on big tech to provide Intel with business.

So for Intel, the risk is obviously some of the things that Megan just talked about.

There's obviously dilution here, right? The grants weren't going to be dilutive.

It certainly appears that he was putting some kind of pressure on the company now.

What's driving it?

A couple of things.

One is record high equity prices, right? A lot of these deals are all stock deals.

So companies have more quasi cash to play with.

That's a big piece of it.

The AI stuff is a big piece, too.

Everybody is trying to figure out their AI strategy.

And I would guess it's the same with M&A.

Why is this sort of little-known company suddenly worth $25 billion?

Yeah, for starters, it's an old company, right? It was founded in 1999 and it's clearly a lot of evolution.

The reason it's being valued so highly is you talked about it being identity security.

If you think about the future of technology and all this talk about AI agents, which are going to do things for us or do things inside of organizations, one of the big problems is you have to be able to, or AI agents have to be able to, identify the validity, the identity of other AI agents, right? Or else...

you get conned or else an AI agent will do something it's not supposed to do.

And CyberArk really solves that problem or is working to solve that problem.

And for Palo Alto Networks, which is this big security company, it's just identity is something it really doesn't have very much of inside its platform.

Any indication of the rest of the deal-making market? Because the attorneys and the bankers that I talk to, they say they're very, very busy.

Or do you think this is kind of a broader theme? The rest of the year will also be sort of ramping up the IPO window.

Well, part of it is we do have a little bit of a kind of a concentrated push because after Liberation Day, you had a handful of companies that were planning to go public in early to mid April, and they all put everything on pause.

They freaked out, they all stopped.

And then, you know, three, four weeks later, they restarted their process.

So you had those plus some that were already planning to go in May or June.

So you had a little bit more concentration than you otherwise would have.

I do think the second half is the big question, right? We don't have a lot of stuff on file for the second half of the year for the summer.

Anything you'd add for people who are thinking specifically about Circle or Voyager?