OpenAI Just Signaled It Might Delay Its IPO. AI Stocks Are Tumbling. Is the Bubble Bursting?
Could a delayed mega-IPO be the first crack in the AI spending boom?
Overview
Artificial intelligence (AI) and chip stocks were sliding again Friday, and this time the spark came from a company that isn't even public yet. Reports surfaced that OpenAI, the maker of ChatGPT, is leaning toward delaying its initial public offering (IPO) until 2027. The company's advisors reportedly laid out two paths: wait until 2027 and chase a valuation of about $1 trillion, or go public sooner at a lower price. CEO Sam Altman reportedly rejected any cut to that trillion-dollar target.
The news rippled straight into chip stocks. Nvidia (NASDAQ: NVDA), one of the world's most valuable companies and the clearest proxy for AI spending, slipped about 1.5% as of this writing, while Advanced Micro Devices, Broadcom, and a swath of other semiconductor names fell further. It capped a rough stretch for the group -- the Nasdaq Composite had its worst day in more than a year earlier this month as chip stocks sold off hard.
Details
So why would a private company's IPO timing rattle the businesses actually selling the picks and shovels of the AI boom? And does it mean the bubble some investors keep warning about is finally bursting?
Source
Originally published at www.fool.com.