SpaceX’s 74-day IPO Implications for OpenAI, Anthropic, World Cup Ads, Bernie Sanders’ AI Plan

0:19I'll see you guys next morning. Thank you.

1:12welcome everyone to the information's ti tv my name is akash pasrisha it is monday june 22nd we are kicking things off today with a conversation with ryan spoon president of yahoo media group We'll cover what he's expecting from Cannes Lions this year. We'll talk about the World Cup. We'll talk about prediction markets. Next up, SpaceX had a strong debut. But what does its IPO tell us about OpenAI and Anthropic? We will unpack a collection of stories we published around that topic shortly. And speaking of IPOs, the information published exclusive reporting that Calci has held informal conversations with banks about its potential IPO.

1:52We'll have more details for you on timing and also Calci's financials. We're going to wrap the show with a look at a new proposal from Bernie Sanders that would give everyday Americans a stake in the AI boom. It's going to be a fun show, so let's get right on into it. Can Lions Ad Festival is kicking off today. There are a lot of changing tides in advertising right now. Meanwhile, the World Cup is still in full swing. To break down all of this, I want to bring on Ryan Spoon, president of Yahoo Media Group. Ryan, welcome to the show. It's great to have you here. Thank you for hosting. Yes, it's an exciting time as always.

2:30So you've got a bunch of your team members in France right now for the Cannes Lions Ad Festival. I wonder what you think the big themes are that you're expecting to come out of that event this week. so i'm back in the in the states as we have um it's a very busy time on the sports front um obviously we'll talk world cup you have the nba draft uh 24 hours away on the advertising side we you know that is the core of our business as yahoo and certainly as yahoo sports and yahoo finance and for us it's the mixture of really premium experiences uh bringing our partners and advertisers front and center to those experiences, whether it be the product, the content, the video, and then mixing that with data and what we know about our logged in really highly engaged audience.

3:28And so this is the best time of year to be with that audience. And on our side, Brian Sazi will be there for the finance side doing interviews and so forth. obviously our head of sales and events team and so forth and then on the sports side we're covering world cup and we are at barclays tomorrow for the nba draft and so forth doing it everywhere i want to get to the world cup in a second here but i mean just if we think about advertising right now and what you're seeing i wonder to what extent ai is changing the the advertising game as you see it from your perspective? So from my perspective, my time with the AI front is really around speed to delivery, better creation of experiences and products.

4:22You talked to Jim, our CEO, just a few weeks ago, and products are the core of what we do. And the more we can push and build and deliver, that creates better experiences for the advertisers. And so for us, it's delivering more, delivering faster, and allowing us to create more environments for the premium ads to live. Let's talk World Cup. So we are in the thick of it. I was just in BC over the weekend. They had games happening in Vancouver. Amazing. Just south of us. There was Seattle. We're in New York right now. You've got New York, New Jersey. um how do you think that this year's world cup or this world cup differs from let's just say the last world cup in terms of the media and and and how the media ecosystem is trying to take advantage of this sporting opportunity so you you have from a very u.s perspective um because that that's where we're sitting, that's where it's hosted.

5:30It's really pretty remarkable in that, first of all, the U.S. is highly relevant as a team and has had two fantastic matches to start and will advance. You also have four names, three of which play today. You have Mbappe, you have Messi, and you have Holland all play today. All were phenomenal. I think they scored seven goals between the three in the opening game. And those names are way more relevant today, in part because of MLS and Apple and obviously what Messi's done. But the sport has grown so much, the fandom has grown so much, and now to do it in the States while the U.S. men's team is so competitive is really remarkable.

6:19And our approach to this has been very consistent with the way that we cover all sports. to do that with partners, to build games around it, to drive that fandom, and to do it with coverage. What have you done differently for this World Cup at Yahoo compared to last one, given the way the media landscape has changed? So we're very fortunate to have a great relationship with Fox, and we built a fantasy as core to what we do across the sports side That is a real leadership and historical part of Yahoo Sports. And so we launched fantasy games with Fox in conjunction to obviously support their broadcasting and bring our fans to that.

7:04And then very different to where we've been in prior years, videos really quarter what we do. We have over 60 hours of live video a week in sports alone. um and you see that with taylor twelman the cooligans the two robbies we have really fantastic live shows and then surround shows to do the coverage are you doing anything with with prediction markets at all um we not specific to um soccer but we obviously have had relationships and have relationship with polymarket across sports and finance uh cal she's now part of our uncrowned experience and coverage so uncrowned is our mma and a combat destination led by ariel hawani so if you would have watched the ufc 250 coverage pre post and so forth uh calci would be part of that got it and so so for for people who aren't familiar with that but basically people can see some of the poly market and and calci prediction markets on the yahoo platform What does that look like tactically?

8:14So I am a big believer that whether you choose to bet in sports or predict in sports, it is important to the narrative of outcomes. Understanding favorites, movement, projections, and so forth is a very important part of the sports fan experience. We've historically had a very long standing relationship with BetMGM. And as that has, as we've now opened up beyond that, that expired this year, a couple months ago, we're now working with different providers and partners, vertical by vertical. So yes, you will see in the, for instance, in the UFC side with Ariel Hawani and the Young Crown side, they will talk about outcomes and projections based on those numbers provided in that case by Calci in the prediction markets.

9:13But you will also see, for instance, providers for the France matchup today to show just how dramatically they are favored. For instance, they're favored by two and a half goals, just for context. Right. I mean, speaking of predictions, I wonder what predictions you might have about how sports media might change in the next year or two. Do you see prediction markets getting into sports media a little bit more seriously? We saw, I mean, I'm thinking about Robinhood. Robinhood, they launched their own media arm. Now there's reports that they're going to wind it down. But, I mean, do you see prediction markets being a central home for sports media or any other predictions going forward?

10:00Look, if you and I had had this same conversation five years ago, this exact same discussion could have existed around, and I took a prior life. I worked at Betting Jam. This same conversation could have existed within the sports betting space, right? These same discussions were there. I don't know ultimately, and by the way, that started to course correct in different places. I don't necessarily know what their role on the media side becomes. I know what our role is, and I think it includes working with them all as partners. Um, but I think very, very core to reporting in media is accuracy, trust, um, um, the need to have robust news desks and partnerships and verification and so forth.

10:58Uh, and that's something we take very seriously. I think that's hard to do if you just dabble in it as, you know, someone has been around. You would test, you know, you'd be able to verify that as well. Right. Well, great. Ryan, I want to thank you for coming on. That is Ryan Spoon, president of Yahoo Media Group here on TI TV. Thank you. SpaceX had a strong run in its first week as a public company, but now we are focused on what its IPO process tells us about when and how OpenAI and Anthropic will go public. My colleague Corey Weinberg went out to his sources to find answers to that question.

11:37I want to bring him on to break it all down. Corey, welcome back to the show. It's great to have you here. Good morning, Akash. So Corey, you put out a couple stories over the weekend and today, the first of which highlighted the fact that SpaceX took 74 days to go public from the time that it filed its confidential prospectus to when it actually listed. 74 days put that into context for us. Is that fast? That was the fastest that I could find among a large tech IPO, which is notable just given how large and complicated this deal was. So a typical IPO takes anywhere from three to four months from confidential filing to actual listing date.

12:20SpaceX took about two and a half, 74 days in total from actually going from confidential filing to the IPO date. And so this was rapid fire. And why was it so fast? There's two legs of the journey for an IPO, essentially, two primary legs. One is the period where the company is getting comments back from regulators after they submit their filing. That's usually weeks, potentially even months. That was very fast for SpaceX. And then there's the period where the company is meeting with investors, explaining the deal, explaining the company on the roadshow. That usually takes at least a couple weeks.

13:09SpaceX shaved some time off of that. So you have this combination of these two legs of the journey, them shaving off a good chunk of it from each. Okay. I wonder, as you think about the speed at all, how much of this is the current administration that we're in? You talked a little bit about it in the story. I mean, they seem to want to expedite things, want to get these companies out to market. What do you make of that? Yeah, this administration is definitely trying to essentially focus on capital formation for the equity capital markets. And these IPOs are a big part of that. So, you know, that first leg of the IPO journey that I talked about, that kind of regulatory piece of it.

13:56Yeah, I think there's essentially a mandate within the SEC to, you know, sort of not hammer companies over the head with comments about, you know, what did you mean, you know, when you disclose this deal or what did you mean by this term or whatever. So, you know, that is definitely a piece of it. And I think that's going to be an important cue for other companies coming down the pike that are considering IPOs, you know, that like, hey, we might have a kind of easier time with the SEC than we otherwise would. And we don't know right now what comments the SEC gave to SpaceX. That'll all come out in the next couple of weeks, right?

14:38Yeah, most likely the next couple of weeks. There's a process where, you know, all the comment letters are, you know, kind of go back and forth between the companies. and the SEC that is unveiled usually a few weeks after a company's IPO. Okay. So you talked about now what this queues up for other companies looking to go public like OpenAI and Anthropic. And you talked about how short a time span this was. So what's your read on things here? Are OpenAI and Anthropic, are they looking to be later this summer IPOs? Are they rushing for the gates? do they want to take advantage of this window what do you think both companies confidentially filed earlier this month and if they essentially are able to match spacex's timeline that would put them each sort of on target to go public as soon as mid to late august which you know so just cancel your summer plans all you ipo watchers it's it could be really fat like i'm i'm scrambling like what am what you know what am i gonna do cancelled all your vacation because yeah yeah exactly four days takes you to august um no it's good that was part of this exercise was uh you know selfishly wanting to plan my year um no i mean so august i feel like never happened in august just as a caveat i mean who knows maybe these companies will be different because you know they can do whatever they they want they can raise more money than god um but uh you know essentially does set the spacex deal does set the pace and and i think open ai specifically has said look we don't need we might not go public immediately um so obviously the companies give themselves some wiggle room you don't have to go public you don't have to you know you can start the process with the sec and then wait a little bit um so that caveat aside still the you know these companies might want to take advantage of a very you know sort of clear market window where where public investors are very much willing to fund top ai companies okay so whenever it does happen the the other story that you published this week looked at when open ai and anthropic but when open ai goes public what are the nuances that the sec could have to grapple with and pay attention to.

17:12Walk us through some of the complexities here with OpenAI and what we could and couldn't, shouldn't expect to see in the filings whenever they become public. Yeah. So if you recall, we published a story last week, sort of unveiling some of OpenAI's financials from the first quarter. And we've reviewed some of those statements and And you sort of want to anticipate what the public is going to see when this confidential IPO filing drops, you know, in a matter of months or weeks. And I think, you know, we've had this kind of at least two year long conversation about these sort of web of deals that OpenAI has done with their own investors.

17:57They've like sort of really raced to amass as much compute and data center capacity as possible. You know, they've done all these deals with Microsoft, with NVIDIA, they've done leases with CoreWeave and Oracle. And so they have these like hundreds of billions of dollars worth of compute commitments that have been talked about ad nauseum. What was striking to me looking at these financial statements is just how light OpenAI's balance sheet is, which is usually the place where you would expect to see debt, capital expenditures, anything related to commitments or hardware or anything they're on the hook for.

18:38The reality is when people look at OpenAI's balance sheet, they're going to see very little debt. They're going to see very little lease liability. And essentially what that means for the IPO process is OpenAI is going to have to explain what these purchase commitments look like elsewhere in the filing. This all follows accounting rules, but I think investors are going to have to be a little bit more sophisticated in OpenAI's case to kind of understand, okay, what are they actually on the hook for? Because it's not going to be on the balance sheet. So for people who haven't spent as much time reading the disclosures that are associated with balance sheets, why is it that all of these multi-billion dollar purchasing commitments don't show up in the balance sheet at all?

19:25I mean, what's the rationale here? I mean, I should definitely say it's standard accounting. They're following accounting rules from what I could tell. But it ties back to, is this actually a deal where you own an operator control or have taken actual operation of the data center? Then it will hit the balance sheet. But these kind of future commitments are all going to be piled into other parts of the S1 filing. um there's a section called commitments and contingencies uh where a lot of off balance sheet leases sit um there's other sections where it could could fit so basically we haven't seen the s1 yet but what i'm trying to just sort of like lay out for people is um you know sort of these these commitments which are as of the end of last year stood at over 650 billion dollars worth in the coming years, you're going to have to look a little bit more to kind of see where those might be and whether they're spelled out.

20:32Right. Now, the other thing that you laid out here is you laid out there would be a lot of considerations around the warrants because of the valuation size. Can you talk about that a bit? Yeah. The other kind of work of OpenAI Financials are in its income statement where one of the largest sort of line items that hit its bottom line is this huge expense related to warrant charges uh you know going back to you know obviously this restructuring deal open ai did to ensure that it would uh you know sort of get out from the original non-profit structure that guided it in its early days it created the separate non-profit that has a stake in open ai and so that's essentially a related party deal where there's going to be this uh expense charge that you're going to see that's very large related to open ai's rising valuation um those warrants can be difficult to value um you know oftentimes uh you know that's just like sometimes investors just ignore it it's a non-cash charge who cares about it um but but otherwise you know people might want to understand it so i mean taking all this together cory you've got this company that will go public.

21:45Their financial statements, they're not hiding anything. It's just you have to look a little deeper to get the full picture. I mean, as you think about this from an investor perspective, does it make it a riskier investment? I'm also thinking about the tentative nature of these deals. If they're not on the balance sheet, then are they more likely to change, therefore adding to the unpredictability of the nature of the business? What does all this tell you about the state of the company um i mean i think you know i'm i'm hoping that there will be a lot of disclosure around different contracts that open ai has signed so that if if i mean this is one of the most important ipos ever you know i i think uh investors will want to get a handle on uh where the risk actually lies and where open ai is on the hook to pay even if demand and sort of shrivels up.

22:40I think that's going to be an ongoing storyline. At the same time, as we saw with this SpaceX IPO and sort of how fast they got through the ringer with both the SEC and with investors, let's be real. This is at least a market period right now where people aren't necessarily asking all the tough questions that they should be. And so will the fundamental investor who's really digging through all these filings, like be the one who, you know, looks smartest in the end. I don't know. But I do think like what I generally believe is that we all benefit from more disclosure from companies. And, you know, that's why, you know, we do what we do as journalists.

23:23And so I would think investors would want the same thing. And I should say, I mean, we're talking a lot about open AI here, but you do point out in the story that Anthropic is in very much a similar situation, Although, I don't know, it feels like my read on it is they've, they haven't, it's no smaller company, but it seems like they've done less or proportionally less of these confusing deals. Well, I think like, yeah, I mean, I think that the shorthand, you know, for these companies is like, you know, OpenAI has been much more aggressive in amassing sort of future data center capacity than Enthropic has.

23:57And that's why you saw them sort of see, you know, sort of struggling with keeping up with demand as their demand spiked this year. But yeah, they've started doing kind of SPB deals, lease deals, and their deals are getting more complicated as well just because they need to amass more compute. Right. Great. Well, Corey, I want to thank you for coming on. That is Corey Weinberg, our senior reporter here at The Information. Speaking of IPOs, Kalshi is another name that people expect one day will go public. It is still a ways out, but my colleague Yueqi Yang caught wind of some of the ways in which Wall Street is preparing for it already.

24:38I want to bring on Yueqi to share with us what she found. Yueqi, welcome back to the show. It's great to have you here. Hey, Akash. So let's talk about the scoop that you started off the story with. You found out Kalshi's latest revenue. What did you find? So according to sources that I've talked to, Cauchy has surpassed$2 billion of annualized revenue. And the fast growth of the business has led to informal early talks between Cauchy and investment banks about a potential IPO. $2 billion, how fast is that growing, do we know? It is fast. Some of the Cauchy's VC investors like to say that Cauchy is the fastest growing startup outside of AI.

25:24If you look at the volume number, it shows that Kaoshi is growing very quickly. The annualized revenue now has passed$2 billion, which is three times more than what Kaoshi shared with investors just in the fall last year. And in the first two weeks of June last month, Kaoshi saw more than$10 billion of trading volume comparing to just less than 500 million training volume in the same period last year. Wow. Now, all of this traction, is it just people betting on the World Cup? Like, what's driving it? Look, it's the summer of sports. I know. I mean, God, we just had, you know, Ryan Spoon on. You've got so many predictions to make.

26:14Yes. So sports drives about 70 % of volume on Calci. So the NBA has been great. World Cup is also a hot betting event for Calci. And then in the fall, you have NFL coming up. You have return elections coming up. So the games never end. That could be the slogan for one of these. The games never end. That's quite fitting. Okay, let's go to the IPO timeline for this company. So you reported that Wall Street has started to approach CalShea, which I think, as you point out in the story, I mean, it's not uncommon for any Wall Street bank to approach a fast-growing startup or late-stage company so that they can get on their good side for an IPO.

27:08Do we know anything about CalShea's plans or even polymarkets plans for an IPO? Timeline-wise, is this something we should be expecting even next year? So the talks between CalShit and investment banks are early and informal. So the IPO will unlikely to happen until later next year or even 2028. We also know from sources that as part of the conversations, CalShit is trying to get banks to integrate with CalShit exchange, which means that the institutional clients of banks will be able to trade on CalShit's prediction markets or even its new perpetual futures product. And this is part of CalShit's push to attract more institutional investors because for the most part of the company's history, it's really propelled by retail investors.

28:01Now, you cover crypto and you covered all of the crypto companies that have sought to go public and under the previous administration ran into some complexities with the SEC. We just had our colleague Corey Weinberg on talking about what the SEC will have to consider with respect to OpenAI and Anthropics IPOs. Do you think that there are some roadblocks here for Calci in going public with the SEC? Or do you think that under this administration, they kind of have a clear path and they might try to get out sooner rather than later? That's a great question. I think the SEC under this administration has been pretty friendly with companies working on pushing financial innovations and pushing the boundary of financial regulations.

28:49regulations, and CalShee is one of those. CalShee does face huge legal uncertainty over the sports contracts that it provides. There are several states that have already sued CalShee, asking it to stop offering these contracts because they allege that CalShee is effectively providing illegal unregistered sports gambling. Now, Kaochi has said that it is regulated by the federal regulator, the CFTC, and it follows federal regulation and so is seeking to dismiss this lawsuit. For a company that faces these legal uncertainty, usually when they go public, they will disclose in details all the risk to investors.

29:33So I'm not sure it will entirely prevent a company from going public, but this is something that they will have to make clear of during their risk disclosure. Right. And I mean, it might not be existential in terms of whether or not it can be a public company, but it could be existential in terms of how much revenue the company generates or what the business model could be going forward. The last thing, Uechi, that you point out in the story is that Kalshi is still looking for a new CFO. Do we have any updates on who is the CFO right now, even? So far, they have an acting CFO who is their chief of staff, Alex Kuoche.

30:14Their prior CFO, which they only hired late last year, has already left the company. So they are looking for a new CFO and getting the finance team ready and getting the audited financials will be a big part of any IPO preparation work. And I mean, look, here's a prediction. I mean, the crypto companies need their CFOs right now more than anyone else, but I think you could see some of those more veteran CFOs from Cryptoland joining CalShift because they have so much experience taking companies public with so much legal uncertainty. Maybe that's something to watch for. Yuechi, I want to thank you for coming on.

30:56That is Yuechi Yang, our crypto reporter, here at The Information. A new plan in Congress would let everyday Americans reap the economic rewards of the AI boom. For this week's Big Read, our tech culture and wealth reporter, Eli Rosenberg, wrote about that plan and one of the big names who is backing it. Eli joins me now to share with us what he learned. Eli, welcome to the show. It's great to have you here. Good to be here, Kosh. So tell me about Bernie Sanders' plan here around a possible sovereign wealth fund. Yeah, so last week, the senator introduced a pretty bold piece of legislation that would levy a 50 % equity tax on major AI companies like OpenAI, Anthropic, Google, once they hit the$200 million threshold in sales.

31:47That equity, again, transferred via a tax, would then be placed in a sovereign wealth fund for the public to be managed by a bipartisan commission. Currently, based on the company's current valuations, that fund would be worth around$7 trillion. And then the plan would be for it to pay out a sort of 5 % annual dividend to the public. And again, at that$7 trillion valuation, that would be about$1 ,000 a person here in the United States. Okay. How close are we to that becoming a reality? Well, I think we're still in the early innings here. There's a lot of ideas about what to do about the changes that AI is going to bring to our economy, what to do about the incredible wealth it may generate.

32:35And this is just one idea. Obviously, Senator Sanders is sort of a leading voice on the left. But as we all know, Congress currently controlled by Republicans hasn't shown much of an appetite, if any, to legislate or regulate AI. So its prospects for passage in Congress right now would seem unlikely. That being said, it feels like a significant step forward in having the conversation about what to do and why we need to be having that now as supposed to later. What do the AI companies think of this? So the AI companies have not weighed in, to my knowledge, on this specifically yet, but they're obviously talking about this.

33:19The idea itself, you can find some of its roots in a blog post that Sam Allman wrote in 2021, actually, before the kind of current AI craze kicked off. But talking similarly about the issues we're still talking about now, that there's going to be all this wealth created. There may be high levels of joblessness. What as a society should we do to respond? And Sam Altman himself, again, and now five years ago, talked about doing a tax that would then transfer some equity in these wealth generating companies to share that wealth with the public. So seemingly, he's not averse to the idea, at least as of five years ago then.

33:59Yeah, that's correct. And there's some reporting now that he's been in talks with President Trump to talk about other ways to grant the government a stake in open AI. That's a little bit of a different mechanism potentially. But I think all the companies in various ways are out there studying the economic impacts of their technology, starting to dip their feet in politically. And it's just not clear exactly which way everyone's going to go. But I think everyone can sort of get on the same page and agree that, you know, we at least need to have the conversation. now uh you talked about i mean reasons why this is not likely to be a reality in the short term at least given the way congress is set up but uh what what is the every everyday public's reaction to this i mean a thousand free bucks that sounds pretty good to me uh but are there more obstacles here that they would have to overcome to make this uh popular with people yeah i mean i think you know, an important backdrop is there's rising skepticism about AI.