When trillion-dollar companies go public

For most of modern market history, investors watched great companies grow in public. Microsoft listed in 1986. Amazon followed in 1997. Google came in 2004. Even Tesla, now one of the world’s most valuable companies, spent years as a public company before reaching its current scale. The next generation of technology giants may follow a very different path.

After SpaceX’s Initial Public Offering (IPO), OpenAI and Anthropic are also expected to reach public markets in the coming months or years. Collectively, they could arrive with valuations approaching $4 trillion. In other words, they may already rank among the world’s largest companies before most investors ever have the opportunity to buy a share.

That raises an interesting question. If the biggest phase of value creation now happens in private markets, what role are public markets playing?

Traditionally, stock exchanges existed partly to provide capital for growth. Investors accepted the risks associated with young companies in exchange for the potential rewards of long-term expansion. Today, many of the most exciting technology businesses are staying private for far longer, supported by vast pools of venture capital, sovereign wealth and private-market funding.

By the time they reach public markets, they may already have millions of customers, global brands and valuations measured in hundreds of billions of dollars.

Index providers are adapting to the new scenario

For investors, however, another change may be even more important. Historically, newly listed companies often waited months or years before entering major indices. This gave investors time to analyse financial results, understand business models and form views about valuation.

That process may now be accelerating. Recent changes to Nasdaq’s rules allow exceptionally large IPOs to be considered for inclusion far more quickly than in the past. Under certain circumstances, a newly listed company can be reviewed within days and added to the Nasdaq-100 within weeks.

The reason is simple. Index providers increasingly face a dilemma if a company worth one or two trillion dollars remains outside major benchmarks for months, those benchmarks become less representative of the market they are supposed to track.

In effect, the rise of mega-private companies is forcing index providers to adapt. This means investors holding passive funds may gain exposure to companies such as SpaceX, OpenAI or Anthropic surprisingly quickly. In some cases, a company could move from private ownership to inclusion in millions of ETF portfolios within a matter of weeks.

The actual index weights may not be especially large. Even combined, these companies might initially represent only a modest share of the Nasdaq-100. But that is not the most interesting part of the story. The real shift is the shrinking gap between private markets, public markets and passive investing.

For decades, companies adapted themselves to the rules of public markets. Today, index providers are increasingly divided over how to deal with mega-private companies once they go public.

A new role for public markets?

This raises a broader question. If venture capital, sovereign wealth funds and private investors capture most of the growth phase, while public investors enter only once businesses have reached trillion-dollar valuations, are public markets becoming less a place for capital formation and more a mechanism for distributing ownership?

The question is not whether SpaceX, OpenAI or Anthropic deserve their valuations. Markets will ultimately decide that. The more interesting question is whether public investors are gradually losing access to the earliest and potentially most rewarding stages of corporate growth.

In the past, companies became giants after listing. The next generation may become giants before listing. The debate is no longer just about whether these companies deserve their valuations, but about how public markets should incorporate them once they arrive. As trillion-dollar private businesses move toward public ownership, index providers are being forced to balance two competing goals accurately representing the market and preserving the standards that have traditionally governed index inclusion.