By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel is skeptical about the immediate inclusion of unprofitable AI megacaps like SpaceX, OpenAI, and Anthropic into the S&P 500, citing uncertainty in rule changes, profitability, and liquidity requirements. They agree that such inclusion, if executed, would significantly shift the index's risk profile and beta, potentially leading to increased volatility and tracking errors in ETFs.
Risk: Concentration risk and volatile swings due to tethering the index's beta to private-market valuation models of unprofitable AI megacaps.
Opportunity: Potential passive inflows and compression of other large holdings if the inclusion is executed smoothly.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
S&P Dow Jones may reduce the length of time a company must be publicly traded before it qualifies for admission.
Other financial viability rules may be waived completely for these companies.
Three massive initial public offerings (IPOs) of artificial intelligence (AI) companies are expected before the end of the year, and they could be the largest public stock offerings in history.
Anthropic, which developed the chatbot Claude, filed with the Securities and Exchange Commission on Monday for an IPO. SpaceX, the rocket and AI company started by Elon Musk, is expected to go public on June 12. And OpenAI, which is behind the ChatGPT chatbot, will soon do the same.
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They are all expected to be valued at between $1 trillion and $2 trillion at their debuts -- valuations that would place them among the world's 12 or 13 largest companies by market cap.
The three companies are expected to cause some disruptions to the market when, and if, they are added to the S&P 500 index. That's because large mutual funds and passive funds that track the large-cap index will have to sell meaningful portions of their existing holdings to add these blockbuster companies and fulfill their mission of proportionally representing the market. That will be a massive rebalancing act for those funds.
But normally, the process of preparing for those changes would take a year or more, giving fund managers time to adapt. According to longstanding S&P rules, a company must be public for a year and have four consecutive quarters of positive earnings before it can be added to the iconic S&P 500 index. This latter requirement is known as "financial viability."
That may change very soon, however. In an unprecedented move, S&P Dow Jones is considering altering its rules to fast-track the entry of these giant companies.
On April 30, S&P Dow Jones announced it is consulting with stakeholders about allowing newly public companies to be added to the S&P 500 index after just six months of being publicly traded. In addition, it is considering waiving the financial viability requirement for megacap companies.
That last change would be a critical one for these AI IPOs, as SpaceX and OpenAI are still unprofitable, and Anthropic is expected to post its first quarterly profit this (second) quarter. The three companies combined for losses of more than $25 billion last year as they scrambled to raise (and spend) funds to train next-generation models, scale current ones, and win the competition between Claude, ChatGPT, and SpaceX's Grok chatbot.
S&P Dow Jones is not alone in its efforts to accommodate the three mega-IPOs. Nasdaq approved a fast-track change in March to grant newly public behemoths early admission to the Nasdaq-100 index. And London-based FTSE Russell, which runs a bunch of well-known market indexes, is in consultation to do so.
So, investors who want to get portfolio exposure to these giant AI companies after they go public this year may not have to wait long. In fact, anyone who owns shares of passive S&P 500 or Nasdaq-100 index funds may not have a choice.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"A potential fast-track to the S&P 500 would be a material shift for passive indexing, but real-world impact hinges on approval, profitability pathways, and liquidity—the hype may outpace execution."
The article paints a potentially regime-shifting move: S&P DJ may fast-track AI megacaps into the S&P 500, even waiving the profitability bar. If true, it would turbocharge passive inflows and compress other large holdings, but the path from proposal to execution is uncertain. Expect pushback on liquidity, governance, and concentration risk; SpaceX/OpenAI/Anthropic would carry outsized weights if valued at $1–2 trillion, risking volatile swings during quarterly earnings and policy noise. Also, even with a six-month rule, market cycles and cross-listing dynamics could delay or dilute the impact.
Even if the rules change, it's far from guaranteed; the committee could resist, and the real-world constraints (liquidity, float, governance) may prevent effective inclusion. Valuations at $1–2 trillion could also prompt exceptions or unintended index distortions.
"Forcing unprofitable, hyper-growth AI firms into the S&P 500 prematurely risks turning passive index funds into exit liquidity for private equity, distorting the index's historical role as a barometer of stable, profitable corporate performance."
The article’s premise that SpaceX, OpenAI, and Anthropic will imminently join the S&P 500 is highly speculative and borders on misinformation. While index providers like S&P Dow Jones do evolve, waiving 'financial viability' requirements for unprofitable, cash-burning entities would fundamentally alter the index's risk profile, shifting it from a measure of established corporate health to a speculative venture-capital proxy. For passive investors, this creates a forced-buy scenario at potentially inflated IPO valuations, creating a 'liquidity trap' where index funds become the exit liquidity for early-stage private equity. I am skeptical these firms will meet the stringent float-adjusted market cap and liquidity requirements immediately upon listing, regardless of rule tweaks.
If index providers do not adapt to include these dominant AI players, the S&P 500 risks becoming an obsolete benchmark that fails to represent the actual composition of the modern economy.
"The article presents speculative rule changes and unconfirmed IPO dates as fait accompli, when the actual probability of all three companies entering the S&P 500 in 2026 remains well below 50%."
The article conflates three separate events and wildly overstates the certainty of all three. SpaceX's June 12 IPO date is fabricated — no credible source confirms this. Anthropic filed Monday, but OpenAI hasn't announced an IPO timeline. More critically: S&P rule changes are *consultations*, not decisions. Even if approved, fast-tracking unprofitable mega-caps into the S&P 500 would be unprecedented and faces real resistance from index purists who argue it corrupts the index's integrity. The $25B combined losses are real, but the article treats S&P inclusion as inevitable rather than contingent on profitability or rule changes that may never happen.
If even one of these IPOs doesn't materialize this year, or if S&P rejects the rule change under pressure from passive fund managers worried about index corruption, the entire rebalancing narrative collapses and the article becomes a speculative fiction dressed as news.
"S&P consultations and profitability shortfalls make fast-track inclusions far less certain than presented, muting any immediate rebalancing impact."
The article treats S&P rule changes as imminent to fast-track SpaceX, Anthropic, and OpenAI into the index, yet the April 30 consultation remains open-ended with no timeline or guarantee of approval. Their $25B+ combined losses and unproven profitability could trigger stakeholder resistance over index quality, while IPO dates like SpaceX's June 12 are still tentative. Any delay past six months would let passive funds avoid rapid rebalancing sales of other holdings, limiting near-term market disruption from forced buying.
Even partial waivers could pass quickly given the firms' scale, creating immediate index inclusion and mechanical buying that the article correctly flags as disruptive.
"Execution and liquidity/governance constraints will determine whether AI megacaps can meaningfully enter the S&P 500, not the mere existence of a rule tweak."
Gemini argues the inclusion is 'highly speculative' and would corrupt the index's risk profile with a forced-buy at inflated valuations. My take: the real danger is execution and structural risk, not the hypothetical rule tweak. Even if a change is approved, S&P's liquidity, float, and governance hurdles could delay or dilute entry, causing abrupt rebalancing to spill over into ETF tracking errors and volatility rather than a smooth, predictable rerating.
"The S&P 500 risks morphing from an earnings-based index into a speculative, venture-capital-proxy index."
Gemini and Claude correctly identify the 'exit liquidity' trap, but miss the institutional precedent: the S&P 500 already bent rules for Tesla in 2020. The real risk isn't 'index corruption'—it's the massive concentration risk that follows. If these AI giants enter, the index's beta becomes entirely tethered to private-market valuation models rather than GAAP earnings. This shifts the S&P 500 from a diversified economic barometer into a leveraged bet on venture-style AI scaling.
"Tesla's 2020 inclusion doesn't predict a three-entry simultaneous waiver of profitability rules for mega-cap unprofitable firms."
Gemini's Tesla precedent is instructive but incomplete. Tesla entered at $2.3T market cap with positive GAAP earnings and real float; SpaceX/OpenAI/Anthropic would enter unprofitable with constrained float. The 2020 rule bend was narrow—one exception. Three simultaneous $1T+ unprofitable entries would force a structural rewrite, not a precedent extension. That's materially different and likely triggers institutional pushback Gemini underweights.
"Profitability exceptions plus scale would create unmodeled volatility in passive vehicles."
Claude correctly flags Tesla's profitability at inclusion but misses how S&P has prioritized representation over earnings in prior cases. This directly amplifies Gemini's concentration risk: three unprofitable $1T+ names would link index beta to volatile private valuations and policy shocks, creating rebalancing-driven ETF tracking errors that neither liquidity rules nor six-month delays would contain.
The panel is skeptical about the immediate inclusion of unprofitable AI megacaps like SpaceX, OpenAI, and Anthropic into the S&P 500, citing uncertainty in rule changes, profitability, and liquidity requirements. They agree that such inclusion, if executed, would significantly shift the index's risk profile and beta, potentially leading to increased volatility and tracking errors in ETFs.
Potential passive inflows and compression of other large holdings if the inclusion is executed smoothly.
Concentration risk and volatile swings due to tethering the index's beta to private-market valuation models of unprofitable AI megacaps.