Modern Australian
The Times

When AI giants go public, will ordinary investors know if they are along for the ride?

  • Written by Sara Ali, Research Fellow and Academic Database Advisor, Auckland University of Technology
When AI giants go public, will ordinary investors know if they are along for the ride?

We’ve heard a lot about the artificial intelligence (AI) boom and how enormous amounts of money are being poured into companies building ever more powerful technologies.

That boom is now taking a new turn as major AI players edge closer to becoming publicly-traded companies.

According to reports, OpenAI is preparing to file confidentially for a public listing that could value the ChatGPT maker at hundreds of billions of dollars. Rivals including Anthropic (Claude) and Elon Musk’s SpaceX – which just absorbed xAI (Grok) – are also moving toward the stock market.

What many people may not realise, however, is that, through retirement funds, pensions and other managed investments, they could end up owning shares in these giants – whether they choose to or not.

And while people might have moral concerns with the AI companies they’re tied to, the greater issue at play is about money, risk and who ends up holding it.

Where AI’s billions go

Building a cutting-edge AI system requires vast numbers of specialised computer chips, running nonstop in data centres that consume enough electricity to power a small city.

OpenAI plans to spend around US$50 billion on computing power in 2026 alone. In 2017, that same company spent roughly US$30 million, a 1,600-fold increase in less than a decade. OpenAI is targeting roughly US$600 billion in compute spending – or that in areas such as processing power, data storage and cloud infrastructure – through to 2030.

It’s not just OpenAI. The big technology companies are collectively expected to invest around US$650 billion in AI infrastructure in 2026. That’s roughly one-third of Australia’s annual GDP – or two-and-a-half times New Zealand’s – being committed to one technology bet in a single year.

All these expenses must be covered before the companies earn consistent profits. This is why they keep raising money – and why the question of where that money will eventually come from is enormously important.

In 2025, total investment in AI companies reached US$217 billion. Then, in just the first three months of 2026, private AI companies raised a further US$226 billion, surpassing the entire 2025 total in a single quarter.

Much of this was concentrated in three transactions: US$122 billion for OpenAI, US$30 billion for Anthropic and US$7.5 billion for xAI.

Together, these three deals alone accounted for 71% of all AI funding that quarter. Mega-rounds above US$100 million now make up 94% of all AI investment by value.

The funding has mostly come from large institutions: venture capital firms, sovereign wealth funds, and technology giants that can afford to take the risk. The gains and the losses stay within a small, specialist group.

When the AI sector goes public

Once a company is publicly listed, anyone can buy its shares.

More importantly, large index-tracking funds – widely used in Australia’s Super system and New Zealand’s KiwiSaver funds – automatically gain exposure to companies once they become large enough to enter the indices those funds follow.

In other words, they don’t get to decide whether it looks like a good investment; the index simply decides for them.

That matters for ethical investors, too. The thought of AI raises concerns about privacy, labour, misinformation and security. But unlike tobacco or gambling, it may prove difficult to exclude because it is being increasingly woven into the world’s largest listed companies.

There is, therefore, a case for asking whether these companies should trigger an opt-out mechanism for fund managers and regulators before the listings arrive.

Neither OpenAI, Anthropic, nor xAI has formally announced a stock market listing, and timelines remain uncertain. When that shift comes, the risk also shifts. The investors who funded the early stages of this race knew what they were getting into.

The people who will end up holding the shares through their pension funds or index trackers may not.

Index providers are rewriting the rules

Here is where the picture becomes more complex. Major index providers are changing their rules so newly listed mega-cap AI companies can enter key benchmarks much faster.

Nasdaq has already adopted a fast-track rule that allows a newly listed mega-cap company to join the Nasdaq-100 after just 15 trading days. S&P Dow Jones Indices is consulting on similar changes that would reduce the waiting period and waive profitability requirements for mega-caps.

These changes are reshaping the index system to funnel passive money into AI giants almost as soon as they list – and before most investors have had time to decide whether they belong in their portfolios at all.

So, what can ordinary investors do?

As they likely won’t be making the call themselves on whether to invest in an AI stock market float, they can put questions to the fund managers doing so on their behalf.

Those might be questions about whether the company is becoming more efficient, what their customer retention looks like, or how their leadership holds up under pressure.

OpenAI’s 2023 board crisis showed how unusual governance structures can create sudden instability.

There is no doubt the AI revolution is real and is changing economies in the same way it is changing our everyday lives.

But whether the AI boom will create lasting value for ordinary investors – or mainly provide an exit for early-stage insiders – is a question fund managers and regulators cannot afford to leave unanswered.

Before the listings arrive, they need to decide: should ordinary investors be automatically swept into the AI gamble, or should they have a choice?

Authors: Sara Ali, Research Fellow and Academic Database Advisor, Auckland University of Technology

Read more https://theconversation.com/when-ai-giants-go-public-will-ordinary-investors-know-if-they-are-along-for-the-ride-282963

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